When you divorce, you might sell your home. Someday, you know you’ll build up that savings account again and buy another home in Florida that reflects your new life. However, planning for that future means the past must be dealt with properly.
When you’re ready to apply for a mortgage, you must have a clean financial record, and the divorce process can leave you with a fairly messy one if things aren’t done right. Your divorce settlement should spell out how debts will be divided, how real estate will be shared and if either spouse will receive alimony. Be sure to discuss the following matters with your family law attorney.
How should your debts be detailed? If your spouse is responsible for the balance on your joint credit card, for example, list the specific account number, issuing bank and balance. A lender will need to know who has responsibility for the account.
Seek to have your name removed from the credit cards and other debts you aren’t responsible for. Even if the settlement agreement states that one party is responsible, you can be held liable for the debt. If your ex-spouse doesn’t pay the debt, it will have a negative impact on your credit. If your name is on the account, you are responsible. That would impact your ability to buy a home in the future or even could hurt you when applying for a job.
How long will you need to receive alimony for it to count as income for your mortgage? One mortgage adviser in Florida advises that for alimony to be considered as income for a loan, you must have been receiving it for six months and must continue to receive it for at least three years after the home sale closes. Therefore, you might ask to spread out the payments.
If your ex-spouse is keeping the marital home, they should refinance and have you taken off the loan. That absolves you of the mortgage debt.
Divorce is stressful when you’re in the middle of it, but don’t let that stress continue into the future. These are issues you will want to handle before the divorce agreement is signed.