Understanding Lenders’ Policies Post Divorce
So, you want to keep the marital home in your divorce, but you’re unsure whether your lender will remove your wife’s name from the promissory note. Hi, I’m Tulsa Dads.Law attorney Clint Hastings. I practice here in Tulsa, Oklahoma, where I focus on fathers’ rights, and I’ve been practicing for about 25 years.
Why Lenders are Reluctant
Most lenders will not remove your wife’s name from the promissory note simply because of a divorce. There are a few reasons for this. Lenders want to know your financial liabilities after divorce—things like alimony and child support can affect your available income to pay the mortgage, which concerns them. Typically, the lender will require you to refinance the loan in your name alone.
Of course, refinancing has its own challenges, especially if your credit has taken a hit during the marriage or divorce, or if your income is lower than before. You would have to requalify for the loan under current conditions.
When Exceptions are Made
That said, I have heard of rare situations where lenders have removed a spouse’s name without refinancing. This usually happens when the borrower has a longstanding relationship with the lender, strong employment history, high income, and an excellent credit score. If you think this may apply to you, it’s best to speak with your lender before the divorce is finalized.
Some lenders will even run scenarios with you—such as what your debt-to-income ratio would look like without alimony or with a certain level of child support—and explore refinancing options or possibly removing your wife’s name.
Move Forward with Confidence
I hope this helps. If you’re facing this type of situation, give Tulsa men’s divorce attorney Clint Hastings a call at 918-962-0900. It can be much more complex than I can explain here, and we’d be glad to walk you through your options.
