If you are intending to end your marriage, you probably already know you and your soon-to-be ex-spouse must divide your marital assets. If you want to remain in your home, you can address its future ownership during your divorce settlement negotiations. Still, you probably have to take steps to remove your spouse from both the mortgage and the deed.
Often, divorcing spouses choose to refinance their homes as a way to eliminate the repayment obligations of the person who will not occupy the residence. You probably have the option of refinancing before, during or after your divorce proceedings.
Refinancing before divorce
Arguably, the easiest way to refinance a home is to do so before you file for divorce. If you go this route, you likely do not have to mention the end of your marriage. This refinancing option removes your spouse’s name from the loan. When your divorce becomes final, though, you probably still must have your ex-spouse execute a quitclaim deed.
Refinancing after separation
If you have separated from your spouse but have not yet officially divorced him or her, you may have to wait for your settlement agreement to refinance your mortgage loan. According to Bankrate, this is because lenders typically want to see your monthly income and debts, matters that are likely to be in flux until after your divorce concludes.
Refinancing after divorce
After your divorce concludes is probably the most difficult time to refinance a home. After all, if you receive alimony or child support payments, lenders usually wait at least six months to determine whether you are actually receiving additional income before they will consider your new loan.
Ultimately, the right time for your to refinance your home mortgage probably depends on a full examination of your circumstances, your mortgage and the law.