Apartment Bought With a Mortgage During Marriage But Registered in the Name of the Husband

Property of each spouse

Property that belonged to each spouse before marriage is individual property and cannot be divided.

Let's look at the example of real estate. The spouse purchased an apartment before marriage and paid a deposit for it, but did not pay in full: in this case, it can be assumed that the property will be common property in terms of paying for the apartment from the family budget. But if the apartment was paid for before marriage, then the wife will not be able to claim it (except in cases where improvements have been made and part of the apartment is recognized as common property by a court decision).

Division of an apartment in a mortgage after the divorce of spouses

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Our readers are often interested in the question of how the mortgage is divided when spouses divorce. Statistics show that more than half of marriages in Russia end in divorce. By the time of the breakup, most families manage to acquire jointly acquired property, including housing taken out on credit. When a person who took out a home loan gets divorced, he faces big problems related to the division of the acquired property.

A mortgage during a divorce becomes one of the stumbling blocks between former spouses. Questions: “How to divide an apartment?” and “How to renew a mortgage?” become even more important if there are children whose rights also need to be taken into account.

There are a lot of nuances that affect the division of a mortgage during a divorce. Let's take a closer look at the main points.

I'll get a divorce!

How the mortgaged apartment is divided during a divorce greatly depends on the timing of the loan. The conclusion of a loan agreement before or after the official registration of marriage will affect the legality of the division of acquired real estate upon dissolution of family ties.

Mortgage before marriage

Divorce from a mortgage taken out before registering the relationship with the registry office is one of the easiest options.

If one of the spouses purchased housing with a mortgage before marriage, then he remains the sole owner of the apartment and will pay the balance of the debt independently.

The second spouse can claim a share in real estate or a compensation payment if he can prove that during his family life he participated in the payment of monthly loan payments or repairs to the apartment were made at his expense.

According to the law, all debts and property are divided equally between spouses, so it is quite possible for a spouse who has no property left to file an application to court for compensation.

Division of mortgage in a civil marriage

According to Russian legislation, people living in a civil marriage do not have obligations to divide property after the termination of the relationship, as in the case of a divorce in a registered family.

Housing purchased during the period of cohabitation will remain with the person who owns it according to the certificate of ownership.

A mortgage before an official marriage can be divided between former lovers only if the apartment was registered for two, and the common-law wife and husband were co-borrowers.

Mortgage during marriage

Housing acquired during marriage automatically becomes the joint property of both spouses, even if only one owner is listed on the title deed.

If an apartment was purchased on credit taken by one of the spouses, then the second in the vast majority of cases is a co-borrower. Thus, both become jointly and severally liable for repaying the debt to the creditor. When family ties are dissolved, all property is usually divided equally.

The question of how to divide an apartment with a mortgage can lead to a dead end , especially if the divorcees still have a significant debt to the bank.

If the spouses maintained a good relationship upon the dissolution of the marriage, then the already divorced spouses can continue to pay the mortgage together. But you will still have to notify the bank about the divorce, especially if this clause is specified in the mortgage agreement.
In most cases, former spouses prefer to divide the property and monthly payments into equal shares. However, today banks very rarely decide to reissue a mortgage, since they risk getting two overdue loans instead of one. Moreover, in the event of a divorce, the bank may demand early repayment of the entire amount of the debt.
You can pay off the debt to the bank, sell the apartment and divide the proceeds in half. If the balance of the mortgage debt to the bank is small, then this will be the best option to solve the problem.
One of the spouses can give up their share in the apartment. In this case, banks agree to remove him from the mortgage agreement, provided that the latter is financially able to make monthly payments on time.

If an apartment was purchased during marriage, but personal funds in bank accounts or inherited were used as a down payment, then if there is sufficient evidence, the spouse who actually bought the home with his own funds can expect to remain its sole owner. In the event of a divorce, the mortgage will be left to him, and the second spouse will be entitled to compensation in the amount of half of the monthly payments paid during the period of cohabitation.

A special situation arises if housing was purchased under the Military Mortgage program. According to its terms, only a military serviceman can be the owner of the apartment, as well as the borrower of the loan.

Members of his family after a divorce will not be able to claim square meters in such a residential space, which contradicts the provisions of the Family Code.

Banks solve this problem by introducing a clause into the mortgage agreement requiring the conclusion of a marriage contract between spouses.

The impact of a prenuptial agreement on a mortgage in a divorce

Divorce in the presence of a mortgage can be significantly delayed. Spouses who are co-borrowers can speed up this process by specifying how to divide the credit housing and who will pay the mortgage after the divorce in the prenuptial agreement.

A prenuptial agreement certified by a notary can be drawn up both before marriage and during family life, including after purchasing an apartment with a mortgage. In the latter case, you must notify the bank about its signing. A credit institution can only challenge how the mortgage is divided after a spouse’s divorce under a marriage contract in court.

In most cases, banks require you to sign a prenuptial agreement before applying for a mortgage. Most often this is due to the fact that one of the spouses interferes with a positive decision on the mortgage. The main reasons may be:

Bad credit history;
Debt load;
Lack of official income of the spouse and, as a consequence, general insolvency of the family.

This marriage contract specifies everything that can happen that is important for the bank, namely:

The second spouse refuses to claim. The division of the apartment into a mortgage during a divorce will occur in favor of the main borrower.
Disclaims obligations and is not responsible for paying the deposit.

Algorithm for dividing a mortgage during divorce

To figure out what to do with a mortgage during a divorce and how to divide it between a divorcing couple without litigation, we will create a step-by-step algorithm of actions:

If the mortgage was issued during marriage and the spouses decided to divorce, then they need to enter into an amicable agreement on the division of the apartment and the remaining part of the debt;
With this agreement, borrowers are sent to the bank's mortgage manager. This should be done after the divorce is officially registered. The bank will need to provide a mortgage agreement and income statements for each co-borrower for the last six months;
If the lender makes a positive decision on dividing the mortgage, two new mortgage agreements are drawn up for each borrower and adjusted payment schedules are issued. To re-register documents, you will most likely have to pay a fee of 1-2% of the debt amount. Or one of the co-borrowers is removed from the list of debtors and is deprived of the right to real estate.

It should be remembered that banks do not like to take risks. The situation when co-borrowers on a mortgage get divorced does not in itself constitute a reason for them to divide payments and the loan balance into two parts or to remove the spouse from the list of borrowers. It is extremely difficult to obtain approval for such a transaction. Therefore, it is advisable to discuss in advance what to do if the bank refuses to change the terms of the agreement.

What happens to the mortgage if spouses with minor children divorce?

In the event of a divorce between spouses and children , like jointly acquired property, can only be divided by a court. The mortgaged apartment is divided taking into account the interests of minor children.

An apartment with a mortgage in the event of a divorce in a family where there is a child can be divided between spouses only if it consists of several rooms. A one-room apartment with a mortgage cannot be divided during a divorce, since it is impossible to allocate shares in kind. If a husband leaves his wife with a small child in a one-room apartment, he may be paid part of the cost of housing in the form of compensation.

What are the division options if the apartment is mortgaged during a divorce and there is a child:

If he renounces his share in the apartment, banks will issue the remaining debt on the loan to the ex-wife only if she has enough funds to pay the payments. If the ex-wife cannot pay the loan, then even in the absence of claims for housing, the husband will remain among the co-borrowers and will be forced to pay mortgage payments.
The one who remains to live with the minor child most often gets a larger share of the living space. The court may divide the mortgage equally or in proportion to the shares in the property. If there are certain circumstances (the mother is on maternity leave, disability or temporary incapacity for work), with the consent of the creditor, the share of the spouse remaining with the child in the monthly payment may be reduced. Child support and mortgage will become the responsibility of the second parent for a time established by the court.
Mortgage and minor children can be connected using maternity capital. After the birth of their second child, many families use the subsidy they receive to partially repay their mortgage debt or make a down payment. In this case, the parents become obligated to include their children among the owners of the apartment. In the event of a divorce, the share in the apartment of the parent remaining with the children will be increased at the expense of the children's shares. The loan debt will most likely be divided equally between both parents, since they are both responsible for supporting their joint children.
After a divorce and division of the mortgage, the mother can pay off her part of the debt with maternity capital. But she will not be able to dispose of her part of the apartment until her ex-spouse fully repays the remaining part of the loan.

Refusal to pay debt by one of the former spouses

If a separating husband and wife do not agree on how to pay the mortgage during a divorce, then if one of them refuses to pay the monthly payments, the arrears will build up. If there is a delay of more than three to four months, the lender has the right to take away the mortgaged housing in order to sell it and pay off the debt.

A situation often arises when co-borrowers on a mortgage divorce, and one of them remains with the apartment. The former spouse who left the apartment may refuse to pay his part of the payment to the bank, citing the fact that he does not use the housing. If at the same time he renounces his share in the apartment, then the mortgage after the divorce, with the consent of the bank, can be re-registered to the remaining borrower.

If the ex-husband or wife refuses only the obligation to pay the debt, then the second spouse will have to independently repay both parts of the payment or wait for sanctions from the bank for late repayment of the loan. Banks usually wait several months, charging penalties on the overdue amount, and then take the apartment and put it up for auction.

The selected apartment can be sold at a cost significantly lower than its market price. The proceeds from the sale will pay off the balance of the mortgage debt, including penalties and late fees. The remaining amount will be returned to the co-borrowers. As a result, a conscientious payer may be left without housing and money.

What else can you do with housing with a mortgage during a divorce?

Dividing money during a divorce is much easier than dividing housing. Therefore, the spouses may try to sell the mortgaged apartment.

To do this, you will need to obtain the bank’s consent and find a buyer willing to purchase the property under encumbrance.

Since buying an apartment with a mortgage is a rather lengthy procedure, the buyer will have to compensate for the loss of time with a decent discount from the market value.

Rarely does anyone like living together after a divorce. If you can’t sell your apartment and split its cost to buy another home, you can move to rented housing and wait until the mortgage expires.

However, without the bank’s approval, the owners will not be able to rent out the apartment. This means that you will not be able to pay off your housing loan using rent payments. But this bank requirement is rarely actually applied.

Mortgage apartments are rented without problems.

Today, the fate of housing purchased on credit and the remaining debt for it to the bank is most often decided in court. Judicial practice based on the division of an apartment purchased with a mortgage is quite ambiguous during a divorce.

Decisions made by courts located in different regions may be diametrically opposed. The result largely depends on the legal knowledge of the spouses or the talent of the lawyer. Therefore, when choosing a mortgage as a way to purchase a family home, you should think in advance and provide for any possible scenarios.

If you need legal support for divorce and mortgage division, then sign up for a free consultation with our online lawyer in the special form in the corner. There is a special promotion until the end of the year. With its help, it is quite possible to receive compensation from your spouse and keep the apartment and protect the interests of the children in the event of a divorce.

We also recommend reading our next post, “Is it possible to sell an apartment with a mortgage?” It is very important for each spouse to know.

We look forward to your questions below and in the application to our lawyer. We will be grateful to you for rating the article, clicking on the social network buttons and subscribing to the news.

Source: https://giak.ru/nalogi/razdel-kvartiry-v-ipoteke-posle-razvoda-suprugov.html

How to recognize property as common

The legislator allows the possibility of recognizing the individual property of spouses as common property. To do this, the interested party needs to go to court, pay a state fee and provide compelling evidence that improvements have been made to the property that in one way or another increased its value.

For example, if the spouses’ funds were spent on renovating an apartment or paying off a mortgage loan, it is necessary to prove the source of these funds and their relevance to the family budget. Moreover, property improvements must be inseparable, that is, they cannot be taken away and moved to another place.

Is a mortgage taken out before marriage considered jointly acquired property?

Let's say an apartment costs 5 million rubles. You pay, say, 2 million of your own money and take out a mortgage for 3 million. After this, the apartment becomes your property. Of course, the apartment remains pledged to the bank until the debt is paid off; however, the ownership of it was acquired by the buyer, that is, the borrower.

Since you acquired the ownership of the apartment BEFORE marriage, the apartment is not the common property of the spouses and cannot be divided. However, three million rubles paid during the marriage is the common property of the spouses. It does not matter whether the spouse worked. That is, the spouse can claim this common property, or more precisely half of it. As a result, the court may oblige you to pay your spouse one and a half million rubles.

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Let's go to court

Which court should I go to?

in the world court at the place of residence of the defendant (if the amount of the claim is up to 50,000 rubles);
to the district office at the defendant’s place of residence (if the amount of the claim is more than 50,000 rubles).

If the defendant’s place of residence is unknown, it is necessary to apply to the court at the place of his last registration in the Russian Federation.
When there is no information about it, the claim is filed at the location of the real estate/most of the movable property. The amount of the state fee depends on the amount of the claim.

What evidence can you use?

payment documents;
contracts;
witness's testimonies.

Mortgage issued before marriage: division in divorce

Property relations between spouses, including during divorce, are regulated by the Family Code. In accordance with it, all property acquired during marriage is the common property of both spouses and upon divorce is divided in half. At the same time, the property of each spouse acquired before the wedding remains exclusively his sole property.

We recommend reading: Similarities and Differences between Labor and Administrative Law on the Subject and Method of Legal Regulation

If at the time of divorce the certificate has not been issued, then the ex-spouse may demand the return of half of the funds paid to the bank from the legally common family budget. Typically, the court will order the mortgage borrower to pay compensation for all years during which the loan was repaid during the marriage. To protect your financial rights, entrust the division of your mortgage property during a divorce to an experienced attorney.

How to split a mortgage

If spouses are divorcing and have a joint mortgage, it can be divided in 3 ways:

One spouse buys out the other’s share and continues to pay the loan.
The spouse submits an application to the bank to replace the party in the agreement.
The apartment is sold, the funds remaining after paying the mortgage are divided between the spouses.

As a rule, the bank is reluctant to replace the debtor in the obligation, since it issued a loan to a solvent citizen, and therefore may doubt the possibility of paying the second spouse (another person), especially if they have any characteristics related to receiving income (for example , is on maternity leave, retired, etc.).

Even if the court indicated in its decision that the mortgage is subject to division, this does not oblige the bank to replace the parties to the agreement.

Mortgage before marriage: how to divide in case of divorce in 2020?

If an apartment was purchased with a mortgage before marriage, then during a divorce, the division of such real estate must be carried out in a special manner.

According to the law, property that was acquired before marriage is not subject to division upon divorce.

However, more and more often young couples who are just preparing for the wedding, that is, are not officially married, are purchasing housing with a mortgage.

But, according to statistical studies, in Russia almost half of all marriages break up in the first three years after the wedding.

Is it possible to take out a mortgage before marriage?

Despite the fact that a mortgage is a type of loan that is most often issued to spouses, the law does not require the borrower to have marital status. Therefore it can be formatted:

a separate individual;
a couple planning to get married, but submitting an application to the bank before the wedding;
persons living in a “civil marriage”.

The latter condition was not previously considered by banks, but has recently gained popularity, subject to the registration of shared ownership of the purchased property.

Resolving the issue through court

If the husband and wife cannot agree, in accordance with paragraph 3 of Article 38 of the RF IC, a judicial procedure is provided for dividing the jointly acquired property of the spouses and determining its shares. Filing a claim for division of marital property is possible:

during marriage;
simultaneously with its termination;
after termination for 3 years (clause 7, article 38 of the RF IC).

Documents and evidence

List of required documents to submit to court for the division of a mortgaged apartment:

copies of the statement of claim for the defendant and third parties;
marriage certificate or certificate of marriage registration;
certificate of divorce or a copy of the court decision on divorce (if the marriage has already been dissolved);
title and status document for the apartment - information about the location of the apartment as collateral with the bank;
certificate of state registration of rights or extract from the Unified State Register of Real Estate;
loan agreement;
payment schedule for loan repayment;
a certificate from the bank about the amount paid and the balance of the debt;
a document confirming payment of the state duty;
power of attorney if the application is submitted by a representative.

This is important to know: How to fill out 3 personal income taxes for a tax deduction for purchasing an apartment with a mortgage

If the division of the apartment does not in any way affect the debt obligations of the spouses to the bank, consent to the division of the apartment from the creditor is not required. The rights of the bank as a pledge holder are not violated - the apartment remains pledged, the creditor continues to exercise its pledge right.

Drawing up a statement of claim

Elements of the claim:

name of the court to which the claim is filed;
information about the plaintiff and defendant: full name, place of residence, contact phone number and email address (optional);
information of representatives, if the claim is filed by an authorized person: full name, place of residence, details of the power of attorney on the basis of which he acts, as well as contact telephone number and email address (optional);
a claim for divorce if the claim is filed for simultaneous dissolution and division of property;
a requirement for division of property indicating which parts of the jointly acquired property should be awarded to the plaintiff and which parts to the defendant;
the circumstances on which the plaintiff’s claims are based and the evidence supporting them.

Deadlines and costs

It will take at least 2 months from the filing of the claim until the court decision is made. Typically, the process of considering a case is delayed for 2-6 weeks - court hearings are often postponed.

The court decision is formalized and issued to the parties a week after its adoption. Within one month, the parties can challenge it by filing an appeal.

If this does not happen, the court decision comes into force.

Costs for the procedure:

The amount of the state fee depends on the price of the claim: for 2020 it ranges from 0.5 to 4%. The cost of the claim is calculated based on the share of ownership of the apartment claimed by the plaintiff.

What to do if the court refuses?

The court may refuse to satisfy a claim for division of a mortgaged apartment and mortgage payments for the following reasons:

the statute of limitations has expired;
at least one mandatory clause is missing in the statement of claim;
there is no consent of the creditor when it is required;
the plaintiff’s demands contradict the legislation of the Russian Federation;
the plaintiff’s demands contradict the interests of common minor children (child), if the spouses have them.

If your claim is denied, you can file an appeal. In this case, it is advisable to take into account the reasons for the refusal and correct all shortcomings, if possible.

The complexity and neglect of the situation, the ambiguity and insufficiency of judicial practice - this is how the considered category of cases is often characterized. In this regard, it is better to seek qualified legal assistance from professionals rather than try to handle the case yourself. This way there will be more chances of success.

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How is a mortgaged apartment purchased before marriage divided by law?

If an apartment was purchased with a mortgage before marriage, it should not be considered joint property and should not be divided during a divorce. However, a similar law applies to property acquired with personal funds.

As for mortgaged real estate, immediately after registering a marriage, it is believed that the debt is repaid from the general budget, which means that equal rights to the property appear. In this case, it does not matter which spouse repaid the loan.

The situation becomes more complicated if the monthly payments were made by the husband, who took out the mortgage before the marriage, and the wife went on maternity leave after the wedding and was on maternity leave.

Such a reason for the lack of personal payments of the second spouse is considered valid and cannot become a basis for refusal to share the apartment.

If the husband or wife takes part in repaying the debt on real estate acquired before the marriage, this is a legal basis for receiving the share due to him in the event of a divorce.

Source: https://uk-mishino.ru/ipoteka/oformlena-do-braka-na-muzha.html

The husband takes out a mortgage in whose name the apartment will be registered

Prove that you sold the flag at a higher price to you. It doesn’t matter ANYTHING to whom the car is registered and DO. It’s still good to take out a mortgage for an apartment while married. Debts are common. And so the husband bought it with his own money in cash, and then the wife chopped off half of it for free.

My husband and I took out a mortgage for the apartment. The mortgage and the apartment were issued for 10 years, in my husband’s name. When applying for the loan, the bank did not give me the opportunity to take out a loan and register the apartment in my name. My husband has two adult children from his first.

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Division of an apartment purchased with a mortgage before marriage

If you? the husband will only say himself that you jointly paid for the mortgage, and there is no other way to prove this, if this is possible, of course, then when paying the mortgage, you can try to write down the credited amount in your last name

07 Jun 2020 etolaw 274

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