How is an apartment divided in a mortgage when spouses divorce?

Former spouses always think about dividing a mortgage during a divorce, since this is a sensitive and complex issue.

It’s not bad when there is little time left before the end of the loan agreement, but what if the divorce occurred during the initial period of payments on a housing loan, and repayment of the loan debt will need to be made over the course of many years?

Which spouse will pay the debt? Who will get the mortgaged living space? There are more questions about this problem than answers. There are many options for dividing a mortgage upon divorce, but some of them are unacceptable for the bank, others are unacceptable for a married couple.

Bank position

Do not forget that in addition to the unhappy spouses, a third party is also involved in this financial love story - the bank. According to the terms of the mortgage, the borrower must inform the credit institution about all major changes in their life: serious illnesses, the birth of children, changes in documents and, of course, divorce. The bank's position is simple - it is important for it to get its money back, preferably with all the interest due under the agreement. That is why the bank that issued the mortgage loan needs to know in advance that the financial situation of clients may change and react in time.

That is why, first of all, when deciding how to pay for a mortgage during a divorce, you should go to the bank to work together to amicably resolve the current situation. In addition, when dividing jointly acquired property, the court will necessarily call bank experts to the meeting, since the court will not be able to make a decision without consent. Changes to the mortgage agreement can only be made by the bank, so the presence of its specialists when dividing the apartment and the remaining debt is mandatory.

Before going to the bank, spouses should first discuss their preferences regarding the division of the mortgage and come to a common opinion. If the joint decision suits the bank’s specialists, the documents can be reissued without examining the materials in court, but if one of the spouses or the bank is not satisfied with any of the proposed solutions, it will not be possible to sort it out without a trial in an independent authority. How is a mortgaged apartment divided during a divorce? There are several main options:

Find your own money for early repayment, pay off the debt, sell the apartment and divide the money in half.
Find a buyer for a mortgaged apartment who will pay off the debt to the bank. The remaining money is divided between the spouses.
Leave the apartment for the use of one of the spouses and re-register the contract and debt in his name. The second spouse must be paid compensation for the monthly payments made during their marriage.
Continue to jointly pay for the mortgage housing so that at the end of the contract you can sell the apartment at the most profit.

What obstacles may arise from the bank? First, spouses may not be given permission to prepay the mortgage loan or sell the mortgaged home to a third party. Problems may also arise if a decision was made to re-register the mortgage agreement to one of the spouses. It may happen that the financial situation of the person who receives the obligations will not satisfy the bank, so re-registration will be refused, or he will have to look for a new co-borrower.

Procedure for obtaining a housing loan after divorce

To obtain a mortgage after divorce, a potential borrower will need to go through the following standard steps:

collection of documents;
submitting an application to the bank;
if approved, search for a suitable apartment;
if refused, contact another bank;
collection and submission of documents on the mortgaged property;
concluding a purchase and sale agreement for a mortgaged apartment with the seller, making an advance or deposit for housing (by agreement);
registration of a mortgage on real estate;
signing a loan agreement with the bank;
payment of the premium under the insurance contract;
submitting documents to Rosreestr for re-registration of ownership of mortgaged housing to the new owner;
final settlement with the real estate seller.

For a person who is still married but plans to take out a mortgage, there is a temptation to start applying for a loan before the official dissolution of the relationship. To avoid additional complications, it is better not to do this:

if the potential borrower is still in an officially registered relationship at the time of filing the application, the second spouse acts as a co-borrower. The second spouse will be able to claim part of the property during a divorce, even if his income is not taken into account when calculating the mortgage;
when the second spouse is fundamentally against divorce, or there are serious disagreements regarding the division of property, it is better to first resolve all issues in court and then deal with the mortgage.

When a potential client comes to the bank with a marriage stamp in his passport, but talks about an impending divorce, this can influence the lender's decision to issue a mortgage. Therefore, you first need to settle the legal side of the separation, and then deal with applying for a housing loan with full confidence in your own abilities. If you are planning to take out a mortgage yourself, but have not yet finalized your divorce, contact a mortgage broker. A specialist will help you get a loan on favorable terms, collect all the necessary documents and speed up the transaction.

We divide property and debts

When deciding how a mortgage is divided during a divorce, it is worth familiarizing yourself with the current legislation. It is important to know that when a marriage is broken, not only material assets acquired during marriage are divided, but also debts acquired during the marriage. Therefore, if the apartment was purchased during marriage, no matter with a mortgage or for cash, it will be divided in half, regardless of who it was registered to. By mutual agreement, former spouses can divide shares in the mortgaged apartment at their own discretion. Often, most of the money is assigned to the spouse with whom the children live.

As for the mortgage debt to the bank, both spouses will also be required to pay it, and also in equal shares. If both agree to this, the bank’s specialists will re-issue the agreement and divide the interest equally so that everyone pays it separately. However, this may pose some problems. For example, if one of the spouses stops paying the debt on his share, the bank may auction off the apartment, while the fact that the second spouse paid his share in good faith will not play a role. Therefore, when such a situation occurs, the responsible half of the former family also pays the share of the one who neglects his obligations. It is important to document such cases, save checks and receipts, so that later it will be possible to recover these amounts through the court.

When deciding how to divide a mortgaged apartment during a divorce, it is worth taking into account the fact that if it was acquired before marriage by one of the spouses, then the other has no rights to it. The only thing that can be demanded is the return of part of the monthly payments paid jointly. There are precedents when a divorcing person receives a share in such an apartment. For such an opportunity to arise, it is necessary to prove that one’s own funds were invested in the housing: for repairs, the purchase of built-in furniture, or a serious contribution was made to pay off the debt to the bank. Only in this case will it be possible to divide the apartment purchased before marriage.

How mortgage debt is divided during divorce: mortgage before marriage

A difficult case is a mortgage taken before marriage, but paid during family life. When spouses decide to separate, they wonder whether the mortgage is divided during a divorce in this case. Resolving this issue requires consultation with a lawyer and depends on his competence.

Most often, real estate purchased with bank funds before registering the relationship is not divided after its termination. The second spouse can submit documents to the court proving that he invested money in the property: checks, receipts, payment for repair work. If there is evidence that the second spouse invested his personal funds, as a result of which the market value of the apartment increased, he can count on receiving an amount equal to half of all payments made.

By law, after registering their relationship, the borrower is required to notify the bank, bring a marriage certificate and make the spouse a co-borrower.

No body - no business

So, you have finally decided to end your family life, despite having an apartment with a mortgage. How to divide an apartment with a mortgage during a divorce so that the whole process is as painless as possible? The best way out is to find your own funds to repay the loan ahead of schedule. The best option is to sell some of the other property acquired jointly, for example, a car or a summer house. After the debt to the bank is repaid, the apartment can be sold as profitably as possible, since housing without encumbrances, a priori, is more expensive than problematic properties pledged to the bank.

How to divide the proceeds from its sale is an individual question. Often ex-spouses divide everything in half, especially if they separate peacefully. There are times when one spouse ends up with a larger sum, for example, if he makes a down payment from his own funds or makes the loan payments alone. If you can’t reach an agreement, it’s better to go to court, where you should present all the evidence of expenses incurred: checks, receipts, contract agreements and other papers.

This option allows you to say goodbye to joint property as quickly and without hassle as possible and go your separate ways as free people who no longer need to have common affairs. However, this option is suitable only if it is possible to maintain friendly relations during the divorce.

By the way, sometimes banks offer reliable borrowers, after a divorce and making a profit from the sale of an apartment, to use this money as a down payment to purchase a new separate home for each. Perhaps this option is the most successful - the former spouses are provided with their own housing, do not have common affairs and common debts. Good relations with the bank also remain, which also benefited: instead of one mortgage agreement, he received two new ones at once.

Married and without property claims: registration of a marriage contract

The most practical-minded people in modern Russia draw up a marriage contract. You can enter into a prenuptial agreement at any point in your marriage. Often, a husband and wife draw up a prenuptial agreement at the time they receive a mortgage loan. Banks support this initiative because the contract simplifies the process of dividing property in the event of a divorce.

Marriage contract

However, a prenuptial agreement does not provide absolute protection against the ex-spouse's claims to mortgaged property acquired during their marriage. In a divorce, a spouse who believes the terms of the prenuptial agreement are unfair can sue and win. Judicial practice in challenging marriage contracts shows that servants of Themis more often make decisions in favor of the plaintiff. According to the law, if one of the spouses is “severely disadvantaged” as a result of the marriage contract, the contract must be terminated. The best way to get a mortgage and not be afraid of property claims from your other half is to wait for the official divorce. After this, you can sign a mortgage agreement with the bank.

We divide the apartment equally

Another option is to leave the apartment as your property and divide the mortgage equally between the former spouses during a divorce. If the loan agreement was issued for only one of the spouses, it is necessary to contact the bank so that all payment obligations are divided according to the agreement and everyone can pay their part of the debt separately.

The same principle applies when dividing the living space itself. It is necessary to allocate the shares due to each and formalize this legally in Rosreestr. Remember that even if the apartment according to the papers belongs to only one divorced spouse, the second one also has the right to the property. If you do not have compelling arguments to deprive him of this right, try not to bring the matter to court - you will just waste time and money on lawyers.

Why leave the apartment, and who will live in it if living together is no longer attractive? There are several options here. After the entire debt is paid, the value of the apartment will increase, which means that the divided property can be sold at a profit, the money can be divided in accordance with the allocated shares and spent at your discretion. So that no one is offended, the apartment can be rented out and the money divided equally or, if the rental amount is enough, used as payment for interest. This option is also suitable if during the marriage the couple managed to have a child. In order for him to get the apartment in the future, you can forget mutual disagreements and continue to pay off your mortgage obligations together.

Determination of the Investigative Committee in civil cases of the Supreme Court of the Russian Federation dated January 24, 2021

However, the Civil Collegium of the Supreme Court saw in them a violation of substantive law. In accordance with Art. 34 of the Family Code, property acquired by spouses during marriage is their joint property. The common property of the spouses also includes movable and immovable things purchased at the expense of common income, regardless of the name of which of them they were acquired or which of the spouses contributed the money. At the same time, according to paragraph 1 of Art. 36 of the Family Code, property that belonged to each of the spouses before marriage, as well as property received by one of the spouses during marriage as a gift, by inheritance or through other gratuitous transactions, is his property. According to clarifications from the resolution of the Plenum of the Supreme Court dated November 5, 1998 No. 15 “On the application of legislation by courts when considering cases of divorce,” property acquired, albeit during marriage, but with the personal funds of one of the spouses that belonged to him before entering into marriage is not considered common property. in marriage, received as a gift or by inheritance, as well as personal items, with the exception of jewelry and other luxury items.

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One has an apartment with debts, the other has money and freedom

However, the above are rather ideal pictures. In real life, it often happens that ex-spouses not only pay a joint mortgage for many years, but also simply cannot talk without shouting. Of course, in this situation, there is no need to talk about any joint decision. As a rule, such issues are resolved through the court, and in order to quickly end all common affairs with their ex, many prefer to give the apartment for sole use, even if it legally belongs to both spouses.

In this case, the entire apartment, along with the mortgage debt, is registered entirely in the name of only one of the spouses. A new agreement is concluded with the bank and a new certificate of ownership is issued. But, since the property was, after all, jointly acquired, a divorced spouse left without housing has the right to monetary compensation, because monthly payments during the barque for housing were paid together (even if this is not the case, it can be very difficult to prove in court) . Sometimes the dispute, again, is resolved amicably, for example, one spouse takes the apartment with debts, and the other takes a car or a dacha without debts, and everyone is happy. If it is not possible to agree on the amount of compensation, again, the court intervenes and assigns it, having considered all the available circumstances of the case.

The only difficulty that may arise here is the bank’s disagreement. If the person for whom the housing is planned to be re-registered does not meet the requirements of the credit institution and it suspects that the payment of monthly payments may stop, re-registration of the contract may be refused. In this situation, you can go to court, where you can prove that the bank made a wrong decision. If you doubt that the case can be won, you should think about alternative options for dividing an apartment during a divorce.

How a mortgage is divided in the event of a divorce between spouses and children: re-registration for one borrower

If there are minor children in the family, it is much easier for one of the spouses to give up their share and re-issue the loan agreement for one of the spouses. He becomes the sole owner of the property and undertakes to repay the debt. Any spouse who is a solvent client of the bank has the right to take out a mortgage. Such a deal has its own nuances.

The bank reserves the right to refuse to reissue a mortgage. When concluding the agreement, the income of the full family and both borrowers was taken into account. When applying for a loan for one borrower, you will need to check his solvency. If the bank considers the borrower’s income insufficient for monthly payments, it will refuse to conclude the transaction.
The spouse who remains with the children has the right to alimony in the amount determined by the state (25% of the average monthly income and 50% for a child under 3 years old). It does not matter whether the spouse and children remain in the purchased apartment and who will pay the debt. If documents for alimony are submitted, they will be collected from the defendant.
When re-registering a mortgage, there must be a special agreement on the payment of alimony, which stipulates a clause on the division of the mortgage. It is important to have the consent of all parties: both spouses and the bank.
The spouse who becomes the sole owner of the apartment is obliged to pay compensation to the second spouse in the amount of half of all payments made. Any other resolution of the issue is unlikely: it is impossible to prove whose money was contributed after a divorce.
The bank has the right to demand a commission for such a transaction in the amount of 10% of the amount of the unpaid debt.

Controversial situations

We have looked at how an apartment is divided into a mortgage in standard cases. However, not everything in life is so simple, and sometimes controversial situations may arise that can only be resolved in court. For example, what to do if a mortgage was issued before marriage for an apartment in a building under construction? In theory, everything purchased before the registry office cannot belong to the spouse. But here’s the catch, a certificate of ownership of an apartment “in share” is received only after the house is rented out, and this can happen already during the marriage, which automatically makes the apartment jointly acquired property. In most cases, the court decides that the person who did not participate in the purchase of the home has no rights, but he can apply for compensation for expenses incurred in paying interest on the mortgage.

Another issue is the notorious civil marriage, which is so popular today. According to the law, if there is no fact of official registration, you cannot claim jointly acquired property. However, in judicial practice there are increasingly more precedents when, in the presence of weighty arguments, property was nevertheless divided. The best evidence in this case is account statements, for example, about the transfer of the down payment amount to the account of a credit institution or receipts for payment of monthly payments.

Apartment with a mortgage: how to divide it in case of divorce

Divorced spouses divide all property that was purchased during the marriage. An apartment purchased with mortgage funds after marriage must be divided equally. The difficulty is that often the borrower (one of the spouses) does not agree to share the apartment, since he is the owner and contributed his personal funds to pay the debt.

From a legal point of view, any property purchased during marriage is community property. It does not matter who is recorded as the owner and whose funds were contributed. Does not affect the division of property and the fact of employment of spouses. A non-working spouse who was supported by the other has the right to receive 50% of everything purchased.

The difficulty of dividing collateral real estate lies in the fact that the living space itself and the balance of the debt to the bank are divided. Any solution to this issue does not relieve one of the spouses from paying alimony for the maintenance of minor children.

A mortgage loan taken out during marriage has its own characteristics. A husband and wife receiving a mortgage are co-borrowers and are obligated to repay the debt equally. The bank does not participate in disputes between spouses and has the right to demand fulfillment of obligations from any borrower if payments are not received on time. Both borrowers are equally responsible for repaying the loan.

All of the above applies to official marriage. In the case of unofficial cohabitation, the mortgage is divided only if both become co-borrowers of their own free will and have equal rights to the apartment.

When concluding an agreement with a credit institution, you should discuss in advance all issues with changes in conditions in the future and check with a bank employee how the apartment is divided into a mortgage after a divorce.

Lay down some straw

How to avoid all this “Santa Barbara”? Of course, no one has yet come up with the perfect advice on how to save a marriage. But in order to suffer as little as possible during the division of property, you can draw up a marriage contract, which for our country remains a curiosity. The document can be drawn up both before marriage and during marriage. This will help, while the relationship is still cloudless, to think sensibly and without mutual offences, which method of dividing property during a divorce will be the most correct and fair.