VA ARM to VA Fixed Rate During Divorce?
Divorce is an unfortunate reality facing many Americans, especially for service members with a VA mortgage. In addition to the emotional and legal challenges, you could be facing the stress of rising mortgage payments if you have a VA Adjustable Rate Mortgage (ARM). To keep your VA mortgage loan, you may need to avoid the unmanageably high payments caused by the VA loan rate hikes associated with a VA ARM by refinancing to a safer, more predictable VA fixed-rate mortgage.
Whether you have a final Divorce Decree in hand or if you’re only considering the first steps down the difficult path of splitting with your spouse, you may want to keep the rate on your VA mortgage loan fixed to avoid a hurried sale from a position of desperation.
If it is an option to keep your home, which is secured by a VA mortgage loan, this may also simplify matters during an otherwise troubled period in your life. The switch to a VA fixed rate loan can help.
Managing Risks: VA loan, Divorce, & Your VA mortgage
Divorce proceedings are delicate affairs, and your financial activity will be under tight scrutiny. Can you refinance from a VA ARM to a safer VA fixed mortgage in such a situation?
According to Sales Manager Christopher Edwards of Peoples Bank & Trust, you can, unless contract language in a legally binding document, such as a divorce decree, states otherwise. The rationale is that both parties, you and your ex-spouse, benefit from the VA fixed rate for the protection of your payment, regardless if there’s an intent to sell the house or to hold it indefinitely.
The Reward: VA Home Mortgage Loan Net Tangible Benefit
With VA ARM loans, there is something known as the VA Net Tangible Benefit when switching from ARM to a fixed-rate loan. In many instances, you are allowed to refinance for the preservation of affordable payments. The VA loan benefit of refinancing is the feasibility of making your payment by projecting a set cost each month and not adjusting up each year, thereby risking unaffordability.
This is for the protection of both your and your ex-spouse against payments continuing to rise–and they will continue to rise as the market is much higher now than when most VA ARM-holders obtained their VA loans, which threatens the stability of the VA home ownership itself. The switch to a VA fixed-rate loan removes this danger from your VA mortgage.
Conclusion
Any party in the divorce proceedings (you, ex-spouse, arbitrator, attorneys) would have to respect the common sense financial responsibility of avoiding home loss due to rising payments, since there would otherwise be a risk of foreclosure or a distressed sale.
Mr. Edwards notes that Peoples Bank & Trust has offered many solutions that have preserved ownership in these types of scenarios, and by educating yourself on the advantages of VA mortgage refinancing, you can give yourself a chance of building consensus with your ex-spouse and his/her agents on moving to a VA fixed-rate loan.
However, if common sense falls short of building consensus, your banker may be able to leverage the Net Tangible Benefit as a legal vehicle to overcome resistance from one or more parties in the proceedings for the prudent action of refinancing to protect your home ownership and VA mortgage loan benefits.
If you'd like to speak to me directly, I can be reached at 855-VA-Loan-0 or 855-606-5626 ext 700!
#homeloanadministration #guaranteedvahomeloan #houseloansforveterans #vahomeloansforveterans #informationonvahomeloans #vahomemortgageloanexperts #gibillhomeloan #LOANSFORVETERANS #homeloansforvets #bestbanktogetavahomeloan #howmuchisavahomeloan #usingthevahomeloan #vahomeloanadministration #besthomeloansforveterans #vethomeloan #bestbanksforvahome #BESTVAMORTGAGELENDERS #buyingahomewithavaloan #disabledveteranhomeloan #fedratehike #FederalReserveRateHikeBoardofGovernors #federalvahomeloan #gibillmortgage #gihomeloan #homeloanveterans #homeloansforveterans #homevaloan #housingmarket #howmuchisthevahomeloan #HOWTOAPPLYFORAVAMORTGAGE #HOWTOQUALIFYFORVAMORTGAGE #mortgage #mortgagecalculator #MORTGAGEFORVETERANS #newvahomeloanprogram #usingavahomeloan #usingvahomeloan #vahomebenefits #vahomeloandetails #VAHOMEMORTGAGE #vahomemortgageloan #vahomemortgageloanexpert #VALOAN #VAloantaxexemptions #VAMORTGAGE #VAmortgageloantaxexempt #vapropertytaxexemption #veteranhouseloan #veteranhousingloan