Divorce is nothing any couple expects to go through when they get married. Unfortunately many couples deal with the realities of divorce everyday and all the marital finances are affected. During a divorce you have to come to an agreement on how your belongings are split up, how the debt is split up, and what happens to the home. Often the person who gets the house is the one that has custody of the children when there are children involved, or the one who can afford to make the mortgage payments.
There are different options to consider when you have a VA home loan and are getting divorced and trying to decide what to do with the house:
- Agree on who gets the house and keep the home if you can afford the mortgage payments.
- Sell the house and divide any acquired equity in whatever way you agree the money should be split.
- Refinance the home into a longer mortgage or lower interest rate in order to make the mortgage payments more affordable.
Since divorce proceedings can take a long time it may be difficult to continue making the mortgage payments every month. Try to come to an agreement on how the monthly payments will be met in order to maintain positive credit for both parties. The last thing you want to do is not make the payments, have a property foreclosure, and have credit problems for years to come. If you have to be late on payments or can't make the payments, contact your lender as soon as possible. They may be willing to work with you to set up a temporary forbearance, or relief of payment. Explain your situation in full and come up with a solution together.
The VA offers another solution to individuals going through divorce to help them keep their home. When you have a problem making the payments on your VA home loan the VA may be willing to do a VA refunding. A VA refunding is when the VA purchases your mortgage loan from your current lender in order to keep them from foreclosing. VA refunds are rare and are only considered in the case of a lender who won't work out a solution with you and is ready to foreclose. They also only consider a VA refunding if it is a temporary problem and you can resume payments in the near future.
Going through a divorce is a very difficult thing emotionally, psychologically, and financially. If you have a VA home loan and are getting divorced be sure to think of your home loan and all the options available to you before you decide what to do with your home and mortgage payments. For more information on divorce and VA home loans contact your local VA office. To find the VA office nearest you go to VA Loan Government Page
Next week we'll investigate how the Veteran's Administration handles the right to have a VA loan in divorce cases. Technically, the veteran retains the right to have the VA loan, and this creates complicated that we will explore in detail. No matter how complex, understanding VA loans is important in knowing how to take advantage of the unique opportunities they provide veterans and their families.