How to Use a Home Equity Loan for Divorce Settlement

Are you wondering how to use a home equity loan for a divorce settlement? You’re not alone! Every month, more than 6,900 people visit this website looking for advice on home equity loans.

In this article, we’ll answer the following questions:

• What are the criteria for a home equity loan?
• What happens to a home equity loan after divorce?
• Should you seek advice before applying for a home equity loan?
• How can you buy your husband out of the house?

We know that understanding home equity loans can be a bit challenging. But don’t worry; we’re here to help you figure things out.

Let’s dive in!

What are the criteria for a home equity loan?

You could apply for a home equity loan if you meet the following criteria:

• You own the property
• There is sufficient equity in the property to meet a lender’s criteria
• You have a good credit history
• Your personal finances meet the lender’s criteria

What happens to a home equity loan after divorce?

If you took out a home equity loan jointly with a partner, you’d both be liable for the payments even after you divorce.

Lenders don’t see a divorce as changing any contract you entered into when taking out the loan.

As such, you’d both still be liable for the repayments even after you divorce.

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Should I seek advice before applying for a home equity loan?

Yes. It’s always worth seeking expert advice if you’re going through a divorce and need financial advice before taking out a home equity loan.

Plus, a solicitor could offer an idea of the cost of a divorce when you both parties agree on things.

They would also advise against hiding any assets because the consequences could be serious when you do.

A home equity loan is only one solution available, there are others that a financial adviser could go over with you.

Remember, when you take out a home equity loan, the money you receive is secured against your home.

Your home would be at risk if you fail to repay the loan.

How can I buy my husband out of the house?

You would need to wait till all financial aspects of a divorce are settled before you buy your husband out of a family home. Things need to be officially settled before going down this route.

See the question often asked by people who go through a divorce and want to buy their spouses out.

Source: Moneysavingexpert

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FAQs

Can I use a home equity loan for divorce settlement?

Yes. You could use a home equity loan for a divorce settlement which could allow you to remain in the property by buying your partner out.

Can I use a home equity loan to pay off divorce?

Yes. As previously mentioned, there are no restrictions on how you use funds you receive from a home equity loan. As such, you can use some or all of a home equity loan during divorce proceedings to pay off your spouse/partner.

Can I use equity release to buy out my partner?

Yes. You can use equity release to buy out your partner when they agree to move out so you can remain in a family home.