Mortgage after divorce, if the spouses are co-borrowers
The mortgage agreement provides for the possibility of participation as a co-borrower of the spouse of the person acting as the main debtor.
However, what if the spouses subsequently decide to divorce?
Legislative aspect of the issue
The issue of division of mortgage obligations in a divorce is regulated by the following regulations:
- Family Code of the Russian Federation;
- Russian Civil Code.
Thus, in accordance with the norms of family law, any property acquired during marriage is joint property of the spouses.
In the event of a judicial division of common property between spouses, debts are also subject to division formed during family relationships.
Civil law contains a provision according to which the division of a mortgage obligation between spouses is possible only if consent of the credit institution.
Consequences of applying for a mortgage loan by spouses
Based on the norms of the Family Code, when applying for a mortgage loan by one of the spouses, the second spouse is automatically registered as a co-borrower.
Acting as a co-borrower, the other spouse assumes the same responsibility for fulfilling the obligation to pay mortgage contributions. In case of default by the first spouse, the credit institution will demand payment of funds from the second family member.
In addition to the emergence of obligations, the co-borrower has the right to living space in the form of a share. As a rule, this share is equal to half of the total living area of the property. However, another ratio of shares may be established by the mortgage loan agreement.
If one of the spouses does not want to bear a financial obligation to the bank and does not apply for new real estate, a marriage contract must be drawn up, which indicates the types of property of each of the married couple, as well as the rights and obligations in relation to real estate acquired in the future.
If the marriage contract between the spouses is not drawn up, and they decide to divorce, mortgage real estate, as well as the obligation to pay money, can be divided in court.
Solutions to this problem
Spouses who have made a decision to divorce and are co-borrowers under a mortgage obligation must:
Regardless of the decision taken, the spouses must must inform the bank about divorce.
Changing the terms of the loan agreement
Withdraw co-borrower From a mortgage obligation in a divorce, there are several ways:
Cancellation of a mortgage
Based on the above information, it can be concluded that waiver of mortgage implemented in several ways:
- Voluntarily by one of the spouses, by drawing up a written, notarized refusal to fulfill obligations, as well as a voluntary refusal to own this property. If the banking organization agrees with this request, then it will initiate the re-registration of property rights with the registering authority, and will also draw up an additional agreement to the main contract;
- By court order based on the decision of the judicial authority. After the relevant decision is made, the main co-borrower acquires the right to re-register the property without the consent of the bank;
- On the basis of a marriage contract, which must indicate that one of the spouses does not claim the mortgage property acquired in the property during a divorce.
Re-registration of real estate rights
Since the ownership of mortgaged real estate is registered until the full repayment of the loan with encumbrance, the spouses-co-borrowers cannot independently implement the procedure for re-registration of property rights.
To re-register ownership bank consent required. In this case, the bank will issue an agreement in which, instead of the previous co-borrowers, the data of only one spouse (the main borrower) will be indicated. This document will be the basis for the registration authority to re-register the ownership and issue an appropriate new certificate of ownership. In this case, the property will continue to be under encumbrance.
Another option for re-registration of property is the effective court decisions. For the registering authority, it is also the basis for entering new data on the person recognized as the owner.
The rules for reissuing a mortgage loan during a divorce are discussed in the following video:
