First time home buyers are not immune from divorce, and while an unfortunate circumstance, it's important to recognize there is a "business" side to it and knowing how divorce affects your credit is as important as the actual legal proceedings.First time home buyers who let "the chips fall where they may" often times find themselves on the outside looking in when in it comes to owning their first home.
Previously we talked about getting a clear picture of your credit and offered some advice on how to handle unsecured accounts.
Even though your divorce decree gives the other party the responsibility of making the payments, if/when they don't your credit will suffer because it was an obligation that didn't get paid and when that happens your credit score is going to suffer.
Thanks to Linda Ferrari from Credit Resource Corporation for this advice for first time home buyers on how to handle secured accounts (loans and mortgages).
B. SECURED ACCOUNTS-YOUR OPTIONS:
• SELL IT: This is the safest and best option. You sell the asset, pay off the loan in full, wipe the slate clean and move on. (The creditors are not always diligent in reporting, so keep copies of the paperwork.)
• REFI IT: If the spouse who has responsibility can qualify for a refinance in their own name, or they have a family member who can assist them with the loan, you can have them buy you out completely and you can walk away without obligation and get your name removed from the account.
• BE CAREFUL: The least desirable option is to keep your name on the loan with certain terms and conditions. This option leaves your credit vulnerable to the responsible spouse's actions going forward. A late payment or a default on the loan will damage your credit.
If you would like a FREE consultation from a credit repair specialist, click here
Check out our video series on managing your credit
No comments:
Post a Comment