When Virginia couples go through a divorce, the property division phase may be one of the most difficult parts of the process. In nearly every case, the couple’s home becomes a major point of contention. Sometimes, the couple sells the home and splits the profits between both individuals. This can help ensure that each receives a portion of the home’s worth.
In other cases, one of the former spouses could assume ownership of the home. In this kind of situation, the home’s new owner generally buys out the other person’s share. If it’s possible, the new owner could refinance the home in order to ensure that only his or her name is on the mortgage. Depending on whether the couple is legally married at this time, the lender may require the divorce decree or a separation agreement. If the couple is not divorced or separated, the lender will likely assume that both individuals still reside at the home and agree to the refinance.
If the individual who kept the house does not refinance, this can reflect negatively on the credit score of the one who moved out. This is because the one who kept the house might not have the ability to make all of the mortgage payments on time. Additionally, the credit report will show the property as being jointly owned by both individuals, possibly preventing the one who left from qualifying for a new home.
When a divorce case goes to court, it can become a very expensive process. Instead, most couples come to some type of agreement long before that stage. Each spouse can find an attorney who can negotiate on his or her behalf.
Source: Credit.com, “How to Divide Your House in a Divorce“, Scott Sheldon, July 09, 2014