In many divorce situations, one party may not be living in the marital home at the time of the divorce but is awarded the marital home through the divorce settlement agreement. Alternatively, one divorcing party may be awarded an investment property that will become their primary residence. Keep reading to learn more about refinancing the marital home when you no longer live there.
Do You Qualify for a Limited Cash-Out Refinance?
A borrower who has been on the title for the preceding 12 months does not have to be living in the subject property and may qualify for a Limited Cash-Out Refinance without a reduction in loan-to-value requirements if they can show:
- They have paid the mortgage for at least 12 months, or
- They can demonstrate a relationship with the current obligor (e.g., relative, domestic partner) and can document they were awarded the property through divorce or legal separation.
This may open up opportunities for divorcing homeowners who also own investment properties. If their intent is to occupy a previously held investment property post-divorce, they may be able to refinance the investment property into a more financially favorable mortgage.
Working With a Qualified Divorce Lending Professional
With so many questions and variables regarding mortgage financing in divorce situations, working with a qualified divorce lending professional is always advantageous for divorcing clients.
It is crucial to work with an experienced mortgage professional who specializes in assisting divorcing clients. A Certified Divorce Lending Professional (CDLP®) can help answer questions and provide excellent advice.
This is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact an attorney or tax professional to obtain legal and tax advice. Interest rates and fees are estimates provided for informational purposes only, and are subject to market changes. This is not a commitment to lend. Rates change daily – call for current quotations.
Copyright 2020 Divorce Lending Association. No portion of this post may be reproduced without the written consent of the Divorce Lending Association.
