If you decide to move forward with divorce, you’ll eventually need to turn your attention to the division of assets and liabilities.
The family home is one of the more difficult types of property to deal with. On one side of things, this can be the most valuable asset that a couple owns. Conversely, with a mortgage in place, there is still debt attached to the property.
The simplest way to deal with a mortgage in divorce is to sell the home. When you do this, any proceeds can be split and you can simply move past this.
There are times when selling the home isn’t an option, such as if one parent wants to remain in order to raise the couple’s children. In this case, the two individuals will need to negotiate a buyout. This allows one person to stay in the home, with the other receiving some form of compensation for agreeing to this.
In this case, it may make sense to refinance the mortgage under the name of the person who will remain in the home. This will work as long as the person remaining in the home is able to make the mortgage payment on his or her own.
It’s never simple to deal with a mortgage in divorce, but this is something that many people have to do as the process unwinds. Since this can be complicated and challenging, it’s best to consider your options as soon as possible. This will allow you to better understand where things stand and how to do what’s best for you and your future.
Source: Bankrate, “Breaking up the mortgage after divorce,” accessed Aug. 03, 2017