Housing Credit in Case of Divorce

At present, resorting to banking institutions to buy a property is common practice. Casas do Barlavento, like other real estate companies, has a close relationship with some banks to offer the best proposal for housing loans to its clients. However, sometimes bank loans turn out to be an inconvenience in the case of divorce.

If you are currently in the process of a divorce, you will indeed have knowledge that you need to make important decisions and go through a lot of bureaucratic paperwork. If you have a housing loan with your future ex-spouse you have 3 ways to proceed:

1. You can decide to sell the property to cover the repayment of the loan and divide the remaining amount.

2. You can choose not to change anything. Both continue to pay the financing of the house, but only one party will enjoy the property – which may be unfair.

3. You can ask for “Desvinculação” of the mortgage loan which allows one of the holders to transfer their share of the loan to the other. This means that one person continues with the credit and the property. For this to be possible, you must ask the financial institution for consent and to review the loan terms. After this procedure, the former spouse will have to buy out the other party. The amount to be paid is defined and agreed between the parties and is called "a torna", which aims to protect the credit holder left without the property. Usually one finds the difference between the value of the property and the amount that has to be paid out of the loan, and the spouse who stays with the house must pay half of that difference to the other. The payment of this loan has to be made in full, which often call for a reinforcement of the housing loan or application for a personal loan to assist with payment.

Casas do Barlavento advises those who are in this situation to consider their options very well, since these decisions will profoundly alter the personal finances of both parties.