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Can a prenuptial agreement affect mortgages?

Events in life can be highlighted as happening in very distinct windows of time. That can leave those in Louisiana who experience them feeling as if they are singular occurrences. However, as anyone who works in family law will likely agree, life is not lived in a silo. What happens today can have a way of rippling. Not only might it be felt far in the future, but some who weren't even around when the original event took place might also feel it. This certainly can be said of marriage and divorce, even prenuptial agreements.

Take that last item for example. A prenuptial agreement is something that typically is drawn up before a couple weds. Its purpose is to spell out clearly what each party brings to the marriage in terms of assets and debts and how those elements will be handled in the event of a divorce. Assets and debts accumulated during the marriage are treated as being equally owned by both spouses.

So how can a prenuptial agreement that might have been signed 10 years ago affect the future? Consider the common mortgage. If the couple's home was bought by one of the spouses before the wedding, ownership questions and mortgage responsibilities could be part of the prenuptial agreement. Likewise, if the couple bought the home together before getting married, provisions could be in the contract.

However, if the couple buys a home later, mortgage lenders are going to want some questions answered, such as:

  • Who will be responsible for payments in divorce?
  • Will the mortgage be under one spouse's name or both?
  • Will the spouses be named jointly on the title?

If the prenuptial agreement carries provisions for the payment of some sort of alimony or spousal support in the event of divorce, that could affect things later, too. If you are receiving that payment, lenders will want to know details before counting it as income that qualifies toward approving a mortgage. If you are making the payments, the lender will want to know all about the details in considering any mortgage application from that individual.

Hindsight is always 20/20. Foresight is not always as certain. With care and experienced counsel, it can be addressed, however.

Source: QuickenLoans.com, "How Alimony and Prenuptial Agreements Affect Mortgages," Dawn Jamison, July 20, 2016

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