Divorce Home Loan FAQs
Why is there a need for special divorce home loans?
We developed the Divorce Bridge Loan Program and the Divorce Loan + Rental Program because traditional mortgage products don’t work well for people going through a divorce in a community property state (such as Texas). In Community Property States, both spouses are responsible for all debt incurred during the marriage (even if the divorce process has already started). Most people are understandably reluctant to complicate the divorce process further by purchasing a new home with their soon-to-be-ex, even though they may be eager for a new permanent home.
Both types of divorce home loans – the Divorce Bridge Loan Program and the Divorce Loan + Rental Program – work around these issues so you can get into your home before your divorce is complete. Whichever program you choose:
- You can move into your new home and get your family settled right away
- You avoid the cost and hassle of getting a new loan (with your soon to be ex-spouse), then paying to refinance once your divorce is final to remove the ex-spouse from the loan.
Can’t my soon to be ex-spouse just agree that I can buy a new home prior to the divorce being complete?
While it is theoretically possible to purchase a home while going through the divorce process, it is risky and can be complicated. In Community Property States, all property purchased during the marriage (even during divorce proceedings) is community property and all debt incurred is community debt. Lenders will also require both spouses to sign documents at closing and the non-purchasing spouse will be responsible if the purchasing spouse defaults on the loan (even after the divorce is complete).
Can’t the mortgage be allocated to me as part of the divorce decree?
Yes, but your lender will require both spouses to remain liable for the new mortgage since the property was bought during the marriage. The only way for the non-purchasing spouse to be liability-free is for the spouse that bought the property to pay the extra costs to refinance it. Would you trust your ex to do that for you?
In the end, even the most amicable exes prefer to minimize their financial entanglements. The Divorce Bridge Loan Program and the Divorce Loan + Rental Program provide better options for people looking to buy a home before their divorce is complete.
What if I use the “Divorce Loan + Rental Program” and decide I don’t want to buy the property after my divorce is complete?
We offer the “Divorce Loan + Rental Program” to help you acquire a home, allow you to move into the home before you divorce is complete, and provide a loan to help you buy the property when your divorce is finished. We agree to purchase the property on your behalf and rent it to you as a service as a part of this complete transaction. You must proceed to close on the purchase after your divorce is finalized.