Any divorce will present a myriad of complicated and emotional decisions. Everything from alimony to child custody and child support will need to be agreed and decided on. However, one of the most difficult decisions that may need to be made is deciding what to do with a home. Valuing and equitably dividing a family home or other property is one of the most complicated, and financially important, matters that will need to be decided during your divorce.
Many have chosen to refinance their home as part of the divorce process. In fact, Forbes.com recently released an article discussing several reasons why refinancing your home as part of your divorce might make financial sense for you.
Regardless of whether or not a mortgage refinance makes sense for you, the most important step you can take during any divorce is to consult with an experienced divorce attorney.
The Family Law Legal Team at Law Offices of Towsend, Tomaio & Newmark, led by Paul H. Townsend a Certified Matrimonial Lawyer, has many years of collective experience working with high-net worth divorce cases and complicated divisions of assets in Morris County and surrounding communities; making them ideally suited to work with any client who needs to equitably divide homes, properties, or other complex finances during a divorce. If you are considering refinancing your home as part of your Morris County Divorce, then let us put that experience to work for you. Call today!
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Possibly the most critical reason to consider refinancing your home as part of your divorce is because of the way marital debt is handled by credit agencies and mortgage lenders. If any debt was incurred under the names of both spouses ,as is common with many mortgages, lenders can still pursue both parties for repayment of that debt despite any court order such as a Divorce Settlement Agreement.
As an example, if one spouse maintains ownership of the family home as part of their divorce’s equitable distribution agreement, many people wrongly assume that doing so transfers all mortgage obligations to the spouse who has possession of the home, and in certain cases this may be true. However in is important to be sure to have your Morris County divorce attorney verify this with your lender..
As an alternative, a divorcing couple can elect to refinance their mortgage or create an agreement stating this to be done shortly after the divorce finalizes. This will change not only the titled owner but, most importantly, change the name of the person taking out the loan. Doing this will remove the obligations of the party not retaining possession of the home, and protect their credit rating moving forward.
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An additional reason you should consider refinancing your home as part of your divorce is the flexibility it can give to your equitable distribution agreement.
New Jersey divorce law states that all marital assets must be divided equitably as part of the Divorce Settlement Agreement. This means that if one spouse wishes to retain ownership of the family home, they then must provide their spouse with some other assets “equitable” to the estimated value of the home. This may mean greater portions of savings accounts or retirement funds, and in some cases may even mean a spouse choosing to forfeit their alimony rights in exchange for ownership of the home. This is commonly referred to as “spousal support buyout”.
Moreover, refinancing a home can provide the funds for one spouse or the other to “buy out” their spouse’s interest in the home. This means that retirement accounts, savings accounts, investments, business ownership, rights to alimony, etc. can then all be awarded and equitably distributed.
Of course, any time you are deciding how to divide your marriage’s assets during the divorce process, it is highly recommended that you work with an experienced and skilled Chester equitable distribution attorney to ensure that all assets are valued accurately, divided fairly, and done so in a manner which protects your financial rights now and in the future.
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To conclude, refinancing your home during divorce could make sense because of the liquid funds which may become available as a result of the refinance. Currently interest rates are at all time lows, and many divorcing couples are taking advantage of this by refinancing their home.
These funds be used to not only more favorably negotiate an equitable distribution agreement, but also to help pay off other marital debts, finance necessary home renovations, or even be reinvested into other things which might provide a greater return on investment than the home itself.
Contact Our Morristown Complex Asset Division and Distribution Attorneys Today
At Townsend, Tomaio & Newmark, L.L.C., in Morristown, our legal team includes divorce and asset division lawyers whose focus is specifically on distribution of martial assets. Partner Paul H. Townsend is a respected and invaluable resource in this area. He has been published in the informational treatise Forensic Accounting in Matrimonial Divorce. Our skill and experience has allowed us to represent our clients in Morristown, Chester, Chatham, Mendham, Harding, Morris Township and all over Morris County.
To discuss your current situation with one of our knowledgeable property distribution attorneys, contact us at our offices in Morris County anytime at 973-828-0829. Our divorce and family lawyers are always available to provide you with a cost-free initial consultation.