What about the mortgage after the divorce?
By getting a mortgage , we are well aware that it is a long-term commitment. These are loans for up to 30 years, so as you can easily guess, many things can happen at this time. We can lose a job, we can get sick, etc. We can also come to the conclusion that our spouse is not a suitable partner for us and therefore we can go out. And as you know, by contracting a mortgage, we sign a contract together and we bear the consequences together.
According to the Central Statistical Office, there are an average of 60,000 divorces each year in our country. What’s worse, this amount is systematically growing. As a curiosity, it can be stated that, for example, in the first quarter of 2015, the marriage contracted 15 thousand couples, and divorced as many as 18 thousand. Most often, as the reason for the disintegration of the application, character mismatches are given. Another reason is alcohol, financial problems or betrayal.
As you can see, divorce is an increasingly common phenomenon and more and more often affects couples who have a mortgage contract.
If a couple wants to part, he must settle all legal matters in the Court, including the division of property. Very often, its main component is real estate. Most often in such a case, the court grants the right to real estate to one of the spouses, and the latter assesses how much money the property must receive for that property. Of course, the court must take into account the fact whether the premises does not encumber the mortgage. This means that the value of the “divided” real estate is reduced by the amount of the loan. However, the court never judges who has the credit to be repaid.
As for the bank, the institution is completely uninterested whether the borrowers are in a relationship or whether they have taken a divorce. Therefore, for the bank, it is absolutely irrelevant who will pay the installment. For the institution, the most important thing is that on the specified day the installment will be credited to the credit account.
Divorce, nothing changes in the credit agreement. As art. 366 par. 1 of the Civil Code , the bank has the right to demand repayment of the loan from spouses jointly or from each of them separately. The divorce and division of property as a result of this case has no impact on the repayment of installments. The only exception to this may be the situation when special provisions were included in the loan agreement, which in specific situations, eg divorcing, transfer the debt to one of the spouses.
So what is the best solution for mortgage holders who have divorced? There are several solutions. The easiest way is to get along with each other and determine who will pay off the installments. You can divide the installments between former spouses and make monthly transfers.
If there is no agreement, the so-called takeover of debt. Unfortunately, this is a bit embarrassing, because the bank will again check the creditworthiness of the person who will take over the debt and it is not said that it will have sufficient income to be able to pay back the debt itself. Fortunately, banks give you the opportunity to combine income with another person, with whom you do not have to be related. The bank may also agree to refinance the debt, thanks to which the repayment of the debt may be spread over a longer period of time, which will lower the monthly installments. The bank may also request additional loan security, ie a surety or additional mortgage.
If none of the solutions listed above is an option, we can try to get rid of the debt completely. You can do it by selling the property. Thanks to this, we pay off the debt from the money obtained on such a transaction, and divide the possible surplus with possible surplus.
When drawing a mortgage, we must realize that sometimes we can have different kinds of problems with it. One of them is divorce. In such a situation, everything must be done to resolve all matters related to the loan after the divorce, settle in a calm and civilized manner, cooperating with the bank in which the loan is incurred. Only then the problem will be solved quickly, and the possible consequences of the divorce case will not be too great.