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How Georgia couples can divide a house in a divorce

Couples who are divorcing usually end up coming to an agreement on how to split up property acquired during their marriage, but dividing a house can be complex for obvious reasons. If one party keeps the house, the other may wish to be paid back for the amount that they invested in it. Complications can arise if the house has decreased in value since the purchase. In such a case, the refinance may net only a percentage of the original amount invested. When this happens, gift funds may be needed from family members to complete the transaction.

Another complication arises if the individual who has the house is not approved for a refinance. Selling or refinancing is the only way to get the other spouse off the loan. Otherwise, the debt will continue to appear on the individual's credit report despite no longer having any interest in the property. Furthermore, if the spouse who owns the home does not make timely payments, it will reflect negatively on the credit reports of both individuals due to the joint liability.

Individuals who wish to apply for a mortgage before a divorce or separation has been finalized should keep in mind that the other spouse will still be considered to have an interest in the property. That spouse will need to sign a document known as a quitclaim deed to release that interest.

After the divorce is finalized, there may still be more steps to take before buying a new house. Former couples should keep a copy of the paperwork relating to the divorce because lenders may need to see it in the future. Credit reports do not always report debt accurately after a divorce, so they should be monitored.

Source: credit.com, "How to Divide Your House in a Divorce", Scott Sheldon, July 09, 2014

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