Posted on: 05th Sep, 2010 08:29 pm
i am just shy of finalizing a divorce. both of our names are on the mortgage. of course, the market is down and we are essentially "under water" --- as far as looking at selling the place. my husband is willing to assume the entire mortgage & i'll sign over the deed via quit claim. i understand this process to require a "novation" from the lender. as such, what criteria would the lender consider in order to grant a novation? i recognize (from the lender's standpoint) that it really does not benefit them to grant a novation. however, aren't there some cases where a novation is succesfully obtained? under what circumstances? is it even worth pursuing? should i contact our lender -- or would that put a "blemish" on our record just for inquiring?
thank you.
thank you.
hi amateri,
there are high chances that the lender will want your husband to refinance the loan rather than a novation. a novation is one of the ways to transfer mortgage from one person to another. your husband should have a good credit score and stable income in order to qualify for a novation. the lender will also check if there's equity in your property prior to agreeing to a novation.
there are high chances that the lender will want your husband to refinance the loan rather than a novation. a novation is one of the ways to transfer mortgage from one person to another. your husband should have a good credit score and stable income in order to qualify for a novation. the lender will also check if there's equity in your property prior to agreeing to a novation.
Thanks! My husband has excellent credit -- we both do. The issue, however, is that (1) there is no equity in this home, and (2) he has several other properties. Of those, 2 are still mortgaged -- though both are fully rented with long term tenants. So, I am not sure he would qualify to re-finance this home ($700K) on his own with a base salary of $100K, though he does have several properties (some mortgaged, others paid for). No idea if the lender would take the risk and let him take the novation??
Also, do you know if it would "hurt" our credit or standing with our current lender to just inquire about all of this???
Thank you.
Also, do you know if it would "hurt" our credit or standing with our current lender to just inquire about all of this???
Thank you.
It will be difficult for your husband to refinance the mortgage as he has various other properties which have mortgages on them. If his debt to income ratio exceeds the required limit, he will not be able to get a mortgage refinance. It won't affect your credit in any way if you and your husband ask the lender about novation or refinance.