What happens to a VA loan in a divorce? Many people may have this question in mind.
A divorce is one of the unforeseen events that can change your life. While focusing on emotional loss, people might forget about the other aspects of divorce. If you have taken a VA loan to buy a home, this might complicate things for you. What happens to a VA loan in a divorce? The spouse gets access to the benefits when being married to a military member. In a case of divorce, the ex-spouse doesn’t have the right to apply for a VA loan.
If you want to know more about a loan after divorce, this post is for you. We cover the critical answers that you need to know.
What happens to a VA loan in a divorce
Veterans can use VA home loans to purchase a home. These loans bring many benefits, such as no down payment required, low interest rates, and no insurance. When they get married, their spouse can also enjoy the benefit.
The VA loan benefits are only available for military member’s spouses, so they lose the right to apply for a loan after a divorce. A military member’s spouse isn’t eligible for a VA loan after divorce. A spouse can only be considered as a qualified borrower if the military personnel passes away.
What happens to a VA loan in a divorce when you have a loan together? The strict requirements can make things complicated since the VA strictly defines who can stay in a property bought with a VA loan.
What to do with your VA loan after divorce
In case the unfortunate happens, you should proceed to sign the property. When the home gets sold, the spouses will put up the money towards paying off the loan. The remaining balance can be divided among the spouses according to your preferences. When the loan is paid off, the veteran can use their benefits again to secure another VA home loan.
If selling the home isn’t an option for your current situation, there is another solution. The veteran can continue paying the mortgage after the divorce until the loan is paid off in full. In addition, the VA loan qualified members should guarantee that they will cover the mortgage even if they aren’t living in the house. Although this option appears to be more complex, it might be a more suitable choice if you have kids.
If the spouses bought the property during the marriage, they have another option available. The veteran can take another loan to buy the spouse’s share and keep the house’s title. To do this, you need to be already legally married when purchasing a home. However, check with your local regulations to find out more details since the rules can vary from state to state. If you live in a community property state, the local Community property laws may apply to your VA loan after divorce.
While a VA loan brings many benefits, it can be tricky after a divorce. However, there are a few ways to get out of the situation. Since every situation is unique, make sure to talk to a professional to find the best solution.