During the dissolution of a marriage, the marital home is usually the largest asset to divide. In addition, it is often also one of the most complicated assets to split. Many Michigan couples find themselves in a difficult situation when it comes to the legal side of the division of assets.
In cases in which one spouse wants to retain ownership of the home, the home often needs to be refinanced. However, this is not always simple. Refinancing requires that the spouse wishing to remain in the house qualifies for a new loan based on his or her income. In addition to income, a lender will also look at the hopeful borrower’s debt-to-income ratio.
According to federal legislation governing qualified mortgages, a person’s ratio of debt to income, including his or her mortgage, should be no more than 43 percent. Although child support and alimony are viewed as reliable income, lenders generally will not count either as income until a person has received steady payments for a total of 12 months. In addition, payments typically have to be expected to continue for a minimum of three years following the closing of the mortgage.
When Michigan couples are trying to determine how to divide assets in a divorce, they may find the task to be more complex than they can handle themselves. For couples in that situation, there is help available. They can turn to professionals for both financial and legal guidance for all aspects of their divorces, including property division and the division of other valuable assets, such as art collections or small businesses.
Source: The Wall Street Journal, “In a Divorce, How One Spouse Can Keep the House“, Anya Martin, Nov. 5, 2014