What to do in case of divorce?
After all, what happens when a couple decides to divorce and is still paying off the credit for the property they bought together ?
These are the most common solutions:
- None of the elements of the former couple stays with the house, choosing to sell it and settle the amount owed and then divide the remainder.
- One of the spouses asks for the disconnection of the credit and transfers the co-ownership to the other holder who becomes the only one responsible for the property and for settling the amount of the missing loan.
In the last option, it will be necessary to present the situation to the financial institution in which the credit was contracted. After the bank's acceptance of the untying of the home loan of one of the debtor parties, there is usually a review of the loan.
In this review, according to what is defined in paragraph b) of paragraph 2 of article 25 of Decree-Law No. 74-A/2017, the banking institution cannot aggravate the spread of the loan in the "supervening occurrence of divorce, legal separation, dissolution of the partnership or death of one of the spouses, when the loan is held by a consumer who proves that the respective household has income that provides an effort rate of less than 55%, or, in the case of households with two or more dependents, less than 60%."
Currently, there are many divorces that do not result in the untying of the home loan, because one of the partners alone does not have the financial capacity to repay the loan. In the worst-case scenario, the ex-partners have to remain both credited.
To achieve the disconnection, it is necessary that those who disengage from the credit and the property sell their part (half of the house) to those who keep the property. This value is called torna (return).
The amount of this compensation is set freely by both parties. One way to determine an amount will be by the difference between the value of the property and the value of the housing loan outstanding on that property. The spouse who keeps the house must pay half of this difference to the other.
Imagining that the property has the value of 200,000 € and the amount owed to the bank is 160,000 €, the difference between these two values is 40,000 €, divided by the two, gives 20,000 €. This is the amount that those who will keep the house must pay as return to those who disengage.
What if you don't have the financial capacity to pay the return?
It is exactly at the stage of determining the return that conflicts may arise, since those who decide to keep the house may not have the amount available to pay the compensation to the other party. In this situation, the person who keeps the house can establish a payment agreement, for example, through phased payment or using other assets of his estate.
Consider transferring the credit
If it is necessary to carry out a reinforcement of the amount of housing credit, it is important to first make a comparative analysis of the market to understand if there are other institutions with better offers currently to transfer your home loan. By transferring your loan you can get better conditions, both APR and spread.
Use our credit intermediation services to find the best solution for your case.