When going through a divorce, many Florida residents place keeping the family home at or near the top of their priority list. Staying in one's home is often more about emotions than financial planning, which is why so many spouses make critical mistakes in their property division negotiations. It is important for spouses to consider their refinancing options before they agree to keep the family home.
Very often, refinancing is not as simple or easy as it may seem. Spouses often remember how easy it was to purchase their home, when both parties provided the required information, got prequalified and then went out house hunting before signing on the bottom line. Refinancing to remove one spouse's name and obtain a new loan solely in the name of the retaining spouse is a different matter.
For one thing, many spouses are unable to qualify for refinancing without including child support or alimony in the equation. Most lenders require proof that those payments have been made in a timely manner for a period of time prior to issuing a new loan. That waiting period can range from a few months to half a year or more. In addition, the retaining spouse will need to have his or her credit screened prior to signing for a new loan, and a decline in scoring could be a problem. Having a demonstrable income history is another challenge for some spouses.
In short, keeping the family home is not always as straightforward as many Florida spouses believe. If that is one's goal, the best place to begin is by sitting down with a lender and working through the numbers. Very often, spouses determine that selling the house and splitting the proceeds is a better option than trying to secure new financing during or after a divorce. That can simplify the property division process, and allow both parties to move on to look for their next homes.
Source: The Huffington Post, "It's Harder to Divorce the House Than the Spouse!", Ashley Tate Cooper, July 17, 2017