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How to get a mortgage after a Massachusetts divorce

The process of ending a marriage can be complicated. There are a multitude of decisions to make and issues to address, and many Massachusetts spouses emerge from the process feeling certain that there important items that may have been missed. When it is time to purchase a new home, one's divorce settlement could greatly impact their ability to secure a new mortgage. The following advice is offered to all Massachusetts spouses who are considering divorce.

The manner in which real estate is divided during a divorce can have a huge impact on the ability of both spouses to purchase another home in the future. In cases in which one party will retain the home and the other will walk away, the manner in which the details are handled is critical. This is due to the fact that the lender is not a party to the divorce, and has no obligation to remove either spouse's name from the mortgage. So, even though one spouse may have no ownership in the family home, they could remain listed on the mortgage.

When it is time to apply for a new home loan, the new lender will often ask for documentation to show that the applicant is not responsible for making the house payments on their former home. The divorce decree may not be sufficient. A lender could request to see bank statements or cancelled checks dating back one year to demonstrate that one's former spouse is making the payments as agreed.

The simplest way to avoid this issue is to address the matter during one's Massachusetts divorce process. It is possible to come to an agreement that the spouse who will retain the home must make a good faith effort to refinance the property in his or her own name within a period of time of the divorce. This means that the other party will be removed from the mortgage, and is free to move forward on a home purchase of their own. This is just one of many small details within a divorce that can have major implications in the years to come.

Source: AOL Real Estate, "Getting a Mortgage After a Divorce: Difficult, Not Impossible," June 18, 2013

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