Toggle Menu Contact Pacheco Perez P.A. Attorneys at Law
Call For A Consultation:
305-742-0063

Does my credit take a hit when the other person gets the house?

During property division negotiations, a divorcing couple often has to decide what to do with a home they own together. If the home is owned outright and there is no lender involved, the process can be simplified. Perhaps one person buys out the other person's interest in the home or someone gives up their interest in the home in exchange for other assets or an agreement about lower support payments.

When the home is still tied to a mortgage, things can get stickier for a couple. If both people are listed on the mortgage and they decide that one person will keep the home, then the other person is at some risk for credit exposure. The best way to deal with such a situation is for the person keeping the home to refinance the mortgage under their name only, but that isn't always possible.

Some reasons the person staying in the home might not be able to refinance include a drop in the home's value compared to the amount owed, the credit-worthiness of the person as a single borrower is not strong enough or the person's income is not enough for a lender to make a deal. These factors can make it impossible for someone to refinance the home, even in the face of a court order.

Another strategy would be to sell the home, pay off the mortgage and have both parties start fresh. This isn't always possible either, for some of the same reasons stated above.

If a mortgage remains in both people's names, then the credit score and report of both parties is impacted by any payment or nonpayment on the loan. Understanding how property division decisions impact your future credit and risks is important to negotiating a divorce settlement that helps protect your future.

Source: Bankrate, "Ex won't refinance to take my name off house," accessed Oct. 28, 2015

No Comments

Leave a comment
Comment Information

Contact Our Miami Divorce Lawyers — Let Us Evaluate Your Legal Matter

To make an appointment for a consultation with one of our experienced family law attorneys, call 305-742-0063 or fill out our simple intake form today.

From our law offices in Miami, Florida, we represent clients in North Miami, Miami-Dade County and throughout the South Beach area.

Email Email Us For A Response

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Pacheco Perez P.A.
2121 S. Douglas Road
Miami, FL 33145

Toll Free: 888-544-1366
Phone: 305-742-0063
Map & Directions