VA Loans and Divorce: Important Facts to Know
When you get married, you expect your partnership to last for the rest of your life. Unfortunately, people change, and the relationship can lose its luster. If you’re experiencing this, you’re not alone. In 2017, 787,251 couples filed for divorce. It doesn’t matter what your reasons are as long as the divorce is the best thing for you and your spouse. But if you’ve bought a home with a veteran home loan, the divorce process can be a bit trickier. Here’s what you need to know.
The Ability to Use a VA Loan Belongs to the Military Member
Only a qualified veteran can use a veteran home loan to buy a house. Their spouse only receives the benefit of the loan as long as they’re married unless the military member passes away. In this case, the spouse may be considered a qualified borrower. Once the divorce happens, the spouse loses all rights to use or apply for a VA loan.
It’s Best to Sell the House
If you bought a home with a VA loan, the easiest way to deal with the value of the home is to sell it. Once its sold, the VA loan can get paid off and the remaining profits can be split between spouses. Once this is done, the veteran can then use a VA loan to buy another home once the original veteran home loan is paid in full. It’s up to you and your spouse to determine how you want to split the profit of the home sale. There’s no right answer—it’s different for every couple. Your attorney can help you determine the best way to split your assets up.
Selling Isn’t the Only Option
It is possible for your spouse to maintain their benefits through the veteran home loan after getting divorced. To do so, the military member must agree to stay on the mortgage and agrees to make payments on the home until the loan is repaid or the house sells. The military member must guarantee payments even if they’re not living in the house after the divorce. This option isn’t always the easiest, but it can provide a sense of stability for parents with young children.
Try to Work with the Right Attorney
When you’re dealing with veterans’ benefits and VA loans, it’s often best to work with an attorney who understands military divorces. They’ll be able to help you negotiate terms with your spouse and can make sure everything gets done correctly so you can maintain your eligibility for VA loans in the future. They’ll also know which documents you need to fill out and what information your spouse needs to submit.
When In Doubt, Talk to an Expert
Getting divorced is a big decision. It impacts your life, your finances, and your emotional state. But it can be for the better. If you’re selling your house and need to take out a new veteran home loan to fund the purchase of a new home for yourself after the divorce, contact us as soon as possible.