Maryland couples who are in the process of splitting up will find property division to be quite complicated – especially when the marital home is involved, which it almost always is. This is especially true if the couple is still legally married and one of the parties wants to buy a new home. It’s not always feasible to wait until the divorce is finalized before applying for a mortgage on a new home. While there are ways to get around this, the process of asset division can be challenging because there are many things to keep in mind.
When one person buys a new home while still legally married, the other party will have to consent to the transaction. The person buying the new house will still be legally tied to the old home unless there is a quit claim deed in place. The party not purchasing the home must sign this and allow the other person to buy the second home.
Another thing to consider is one’s credit score. Until the divorce is finalized, both parties are responsible for paying the mortgage on the marital home. Even if one party is staying in the home and claiming responsibility for the monthly payment, the other person is still technically on the hook if payments are not made. If a house payment is not received in a timely manner, a person’s credit score can be severely affected.
If one is refinancing or using gift money to buy out the ex-spouse, things become even more complicated. It is important that both parties understand their rights and responsibilities when it comes to dividing assets in a divorce so they don’t end up suffering negative consequences in the end.
Source: FOX Business, “How to divide your house in a divorce,” July 14, 2014