Should You Ask Your Parents to Co-Sign a Mortgage Loan After Your Divorce?
By the time you get to divorce mediation, you and your spouse might not agree on much, but you will still agree that you want your divorce to cause as little stress for your children as possible. Couples who cannot afford it almost always choose to set the terms of their marital settlement agreement such that at least one spouse can stay in the marital home, so the children do not have to move. The rationale is that adjusting to having two households instead of one is less stressful if one of those households is the one where the children have already been living since the parents’ divorce. This usually means that the spouse who is keeping the marital home must refinance the mortgage so that it is solely in his or her name. This is no simple task, given that the average mortgage interest rate for a 30-year mortgage issued in October 2024 is 6.3 percent. Even if the principal amount after the refinance is considerably lower than your original mortgage because you have equity in the house, the monthly payments can be difficult to afford on a single income. For help strategizing about how to afford to keep your house after your divorce, contact a Boca Raton divorce lawyer.
More Stability for Your Children, But Less Independence From Your Parents?
A possible solution to the challenge of getting approved for a mortgage refinance is to ask a family member to co-sign the new mortgage loan for you. If your parents own their home outright or have paid off most of their mortgage, they can easily qualify for the mortgage you want for your children. Even if it would be possible to qualify without your parents as co-signers, the mortgage would be less expensive if they co-signed.
Of course, asking your parents to co-sign a mortgage loan with you puts you in a similar situation to where you would be if you asked them for money. They might feel like they should have a greater role in decisions related to your house and your children.
A Temporary Solution?
Signing a mortgage loan with your parents as co-signers can be uncomfortable; it is the First World problem equivalent of moving in with your parents and living under their roof. The good news is that co-signing with your parents does not always mean that you will jointly be on the hook with them for hundreds of thousands of dollars. FHA mortgages come with an automatic co-signer release; the co-signer is only responsible for the loan for the first few years, after which it becomes solely the original borrower’s responsibility. Even if you don’t have an FHA mortgage, you can refinance your mortgage again in a few years when you are in a better position to afford it on your own.
Contact Schwartz | White About Getting Divorced Without Uprooting Your Family
A South Florida family law attorney can help you reach a resolution about staying in the marital home after divorce. Contact Schwartz | White in Boca Raton, Florida about your case.
Source:
atorrated.com/blog/how-to-buy-a-house-with-a-cosigner-in-florida
