It’s become an unfortunately common scenario for divorcing couples in Brooklyn to decide that one spouse can keep the house, but then find that tighter lending standards mean that that spouse can’t refinance the loan to remove the other party from the mortgage.
Few things can ruin a carefully negotiated settlement faster than for the spouse who has let go of the home to learn that they still bear financial responsibility for it, and that their credit can be wrecked if their former spouse falls on hard times.
What Are Your Options If You Can’t Refinance?
The simplest solution in cases where one spouse can’t refinance a mortgage into their name is simply to sell the house, but even that is complicated by the sheer number of properties that are still “underwater.”
A short sale is one option, where the lender agrees to let you sell the home for less than the value of the loan, but that has negative credit consequences for both spouses, and you run the risk of having a large tax liability as a result.
Handling the distribution of property can be even more difficult than usual in today’s economy.
The attorneys at Zelenitz, Shapiro & D’Agostino can help you find the best way forward when you run into refinance problems during a divorce.
If you have questions about a loan you need to refinance in your name, call us today at 718-725-9601 for a free consultation with an experienced Brooklyn divorce attorney.