What is a divorce refinance?
There are several reasons to refinance your mortgage after a divorce.
Alabama is an equitable distribution state, meaning property is divided fairly, though not necessarily equally. When deciding who gets the house, judges may consider factors like the length of the marriage, each spouse's financial condition and ability to earn a living, and each spouse's contribution to the marriage,
Cash out refinance– This option is used the majority of the time to pay off the leaving spouse their part of the equity in the home. Another reason for this option is to pull cash out of the home to pay off marital debt or to combine a home equity line of credit into the mortgage.
No Cash out Refinance– Often referred to as a “Rate Term Refi” can be done to cut the rate and reduce the term of the loan to pay it off quicker. This option is used to just remove the other spouse off of the deed and the current mortgage on the home if there is no equity that is due to the spouse.
Refinance your adjustable rate mortgage into a fixed rate 10, 15, 20, or 30yr mortgage.
Most of the time the only out of pocket expense is for the appraisal. And in some instances, there is no appraisal required.
That is where I come in, I am here to help guide you through the process and go over your options. In my 15+ years in the mortgage industry, I have done hundreds of divorce refinances and can help guide you through the process.
The spouse keeping the home must qualify for the new loan based on their own income and credit. Lenders will look at factors like employment history, verifiable income, debt-to-income ratio, and credit score. Alimony and child support can be considered income if they are consistent and expected to continue and if you have received them for at least 12 months consecutively.
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