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- @LawRato , please provide an answer to the above issue .CommentQuote0Flag
- Banks, or other lending institutions consider all applicants equally liable for the amount loaned. In a situation like divorce it is more about the mutual consent of both the partners as to who bears how much or takes what though the actual time of drafting such conditions is prior to availing a loan jointly.
A few amicable ways to settle such an unforeseen matter could be as follows:
(1) To simply clear the loaned amount by selling off the property as early as possible and dividing the residual amount as decided upon mutually.
(2) Taking over of the property by one of the partners after paying back the contribution of the other. In such a case the property can be refinanced depending on the remaining amount of loan and the repaying capacity of the new owner.
(3) Clearing the other partner's name from the loan account. In such case too the lender would first assess the possibilities and the capacity of the remaining borrower's repaying capacity.
The thing is that though it may sound very unasked for, buying a house jointly should involved legal paperwork and drafting down of the terms and conditions and privileges of one or both the partners to avoid problems in such a scenario. But then, that would also bring in some sourness in the relationship if the other partner looks at is as a negative mentality of the other, who is preparing for a situation like divorce. That also is something to handle with care.
Both of you will remain joint owners of the property even after the divorce as the property is jointly owned by both of you and divorce will not change ownership status of the property. Along with that, the liability pertaining to home loan and division of property will also exist as they do at present.
However, it is advisable that you settle the distribution of property and other assets before the divorce itself via a settlement deed as it would prevent any discomfort or dispute from arising in future and both of you can lead separate lives without any interference from each other.
- Thanks a lot for explaining it LawRato - so it has to be mutually solved.CommentQuote0Flag