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Separation Anxiety: How to Deal with a Joint Mortgage Loan in the Event of a Divorce

Separation Anxiety: How to Deal with a Joint Mortgage Loan in the Event of a DivorceDuring the course of a marriage, it is common for the couple to acquire property together. This is what is referred to as joint or community property.

When a couple divorces, it is up to the parties involved to determine what happens to this joint property or let a judge use applicable law to determine how property is to be split.

What Happens To The House?

A couple of options are available when deciding what to do with a house where both partners are listed on the mortgage. First, the couple may decide to simply sell the home and split the proceeds from the sale.

Another option would be for one person to give the other person the house as part of the divorce settlement.

Technically, the house is sold or transferred and whoever gets the home is now the sole person listed on the mortgage.

Beware Of The Tax Implications

Typically, the person who gets the house should be the person who is in the lower tax bracket. This is because capital gains taxes may be lower or non-existent for those who are in the 10 or 15 percent tax bracket.

If the house is sold and the proceeds are split, capital gains taxes are exempted on the first $250,000 of profit made on the sale. For a married couple, the exemption is $500,000. Therefore, it may be worthwhile to sell the house before the marriage is over.

What If Children Are Involved?

In the event that the divorcing couple has a child, the best interest of the child must be considered. Typically, a judge will award a principal residence to the parent who will raise the child after the divorce is finalized.

To help the custodial parent afford any payments on the house, the other parent may be asked to help make payments as part of a child support or alimony agreement. This may be beneficial to the noncustodial parent as payments that are considered alimony are tax deductible.

When a couple divorces, they have a lot to think about. As this may be an emotional time, figuring out what to do with a home where both parties are on the mortgage can be difficult. However, those who are divorcing amicably or who want what is best for their children can come to an agreement without a lot of stress or drama.

Lowballing 101: How to Avoid Insulting a Home Seller when Making a Low Offer for Their House or Condo

Lowballing 101: How to Avoid Insulting a Home Seller when Making a Low Offer for Their House or CondoBuying a home is a huge step for people who are ready to make an investment in their future. Getting a great deal on a home is just as important and knowing how much to offer could be confusing. It is important to make sure the home seller is not insulted by the lowball offer and is ready to negotiate to make sure everyone wins.

Make a List of Necessary Improvements

One of the best ways to validate a lowball offer on a home is to list improvements that need to be made to the property. If the home needs a new roof or a new heating and air conditioning system, these are reasons to offer less than the asking price. Sometimes a home may also need new flooring, paint, or matching appliances which all cost money. The buyer can make a lowball offer stating additional expenses of making sure the home is move in ready.

Explain Any Issues with the Location

Another option when considering a lowball offer is to point out problems with the location. If the home is on a busy street or close to a manufacturing district, the buyer has legitimate concerns. In the offer, list the potential problems of living too close to fast food restaurants, train tracks, or airports. A less desirable location could equal a great buy on a new home.

Provide Pricing for Comparable Homes in the Area

A knowledgeable real estate agent can help compare homes that have sold in the area. When you are writing up a lowball offer, look at the lower priced homes that have sold in the same neighborhood. A seller will quickly realize that if he wants to sell the home, he will need to accept a reasonable offer or risk letting his house sit on the market for weeks or months.

Consider the Seller’s Reasons for Selling

Finally, the seller’s situation can also be key in getting a good deal on a home. If the seller is desperate to sell because of a job relocation or if he has already bought a new home this can be the perfect reason to make a low offer and take the home off the seller’s hands. Without insulting the seller, the buyer can make an offer for less than the asking price and agree to a quick closing.

Scam Alert! Three Mortgage Modification Scams to Watch out for (And How to Avoid Them)

Scam Alert! Three Mortgage Modification Scams to Watch out for (And How to Avoid Them)As if homeowners who are facing foreclosure don’t have enough to worry about, a multitude of loan modification scam artists have invaded the internet, public files and even foreclosure notices in newspapers in hopes of targeting their next victim. By identifying the top three modification scams and learning how to avoid them, at-risk homeowners can protect themselves (and their homes).

Never Pay For Mortgage Modification Assistance

Many desperate homeowners fall victim to scam artists who offer to provide them with assistance in the loan modification process for an exorbitant fee. Many times the scam artist who promises to provide assistance will require that the homeowner pay the fee upfront, after which they will provide very little assistance or simply take the money and run. Consumers should be aware that assistance and counseling services are offered for free through a number of reputable HUD approved counseling agencies.

Avoid Transferring The Deed

One popular scam that at-risk homeowners often face is the property deed scam in which scam artists promise to purchase the home in question, agreeing to let the desperate homeowner rent it out. They suggest that turning over the deed to a borrower with a better credit rating will offer additional financing opportunities, thus preventing the loss of the home. The scammer often promises to sell the home back to the homeowner, but in reality has no intention of doing so.

Many times the scam artist will sell the home to another buyer. In some instances, the crook will collect any processing fees, take the title to the home and any equity, and then leave the home to default. It is a good idea for consumers who are approached with a property deed scam to report it to the FTC.

Ignore Unrealistic Promises

Mortgage modification scammers often make promises to do such things as negotiate a solution to the foreclosure more quickly, process mortgage payments for the consumer while the negotiation is being worked out, or even guarantee a loan modification. Since the actual lender is the only one who can agree to a loan modification, and this solution requires additional processing time, overnight fixes are almost always scams. Additionally, consumers should never make mortgage payments to anyone other than their lender.

For additional information about mortgage modification scams and how to avoid them, or to receive assistance with working out a solution to avoid foreclosure, at-risk homeowners should contact their mortgage professional.

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