When a married couple decides to buy their first home, the most common is to opt for a joint mortgage. The greatest benefit of this option is that they have a greater chance of success in obtaining the mortgage, because both represent a greater guarantee in the event of default.
If the couple happens to separate, this type of loan can become a source of ongoing struggle. The intervention of a judge may even be necessary if it is not possible to reach an agreement between the members of the couple. Next, we will tell you in more detail the possible situations in which you may be involved.
WHAT HAPPENS IF THE MORTGAGE IS NOT PAID?
If you are in the process of separation, the mortgage must be returned in equal parts by you and your spouse according to the documentation of the loan. When you are involved in a no-deal separation, reaching a deal between the two of you is very complicated. In this case, the intervention of a judge will be essential, who will decide also taking into account the presence or absence of minor children.
Likewise, you will have to bear in mind that if you make the decision with your partner not to pay the mortgage, you are going to find yourself involved in another legal procedure in which the bank demands payment or abandonment of the home known as eviction.
Before starting to see the different solutions, we want to explain the difference between separation and divorce, since they are two different stages in the process of ending the marriage bond.
DIFFERENCE BETWEEN SEPARATION AND DIVORCE
The separation lies in the interruption of the relationship between both spouses, which has two possible outcomes. One is the final completion through divorce and the other is to restore the couple's relationship within a time.
WHAT TO DO WITH THE MORTGAGE AFTER DIVORCE OR SEPARATION?
Domestic Possession and Alimony Deduction
In the first place, it must be taken into account that in the event of separation, the objective of the pension is to try to guarantee the ex-partner and the children a standard of living similar to the one they had. Sometimes the spouse who receives the highest income can choose between paying the mortgage payment in full, and reducing this amount from what they would have to pay as food. It is an internal assumption of the obligation since it is not raised to a public deed, involving the bank, but for greater security it can be raised to the public.
Assumption and external withdrawal
When a documentary assumption of the entire mortgage takes place by one of the spouses, they become the 100% owner of the loan, being the sole owner. We are facing an external assumption, because the bank is directly involved and will decide whether or not to accept the termination of the contract by one of the borrowers. The bank's decision will depend on the solvency of the spouse who is willing to take over the loan in its entirety.
If the bank does not approve it, it is also possible to terminate the contract by subrogating or transferring the loan. This option allows you to transfer the loan to a new credit institution.
Selling the property: is it worth it?
The third option is that you drain the property through the market: the money from the sale can be used to pay the mortgage in advance and distribute what is left over.
It is clear that this solution involves getting rid of the house, so it is the most inconvenient, especially if there are minor children involved. Therefore, the choice of which option to choose in the case of separation with joint mortgage must be adapted to the specific circumstances of each family and there is no single best solution.
Early repayment of the loan
If the missing installments of the mortgage do not represent a considerable amount of money and you want to keep the house for your children, early amortization may be the solution.
If you need a lawyer to take your case and advise you, call us.