The January/February issue of Realtor Magazine highlights a few of the issues that can face divorcing couples during the process of selling their home and potentially after ownership has changed hands. Proper planning can help avoid one or both spouses finding themselves ineligible to qualify for a mortgage. This can impact the couple both in terms of one or the other spouse planning to refinance the joint mortgage while remaining in the home, as well as planning to buy another home with a new loan.
A California Realtor shared the story of a client who tried to refinance after a divorce, only to learn there was a 10 year old lien against the property. Few people think to run a background title report on the home as part of the divorce process.
Another mistake divorcing couples can make is not making needed adjustments to the homeowner’s insurance policy. Just because two people are married and on the deed does not mean they are both named as insured parties on the home. If one spouse is listed only as an insurance beneficiary and remains in the home, they may not be covered after the divorce is final.
The moral of the story is that although the entire divorce process can seem overwhelming, it definitely pays to consult professionals well in advance of needing to sell the family home.