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3 Ways to Deal With Your Mortgage After Divorce

Having a mortgage to pay is a serious responsibility. Juggling that mortgage with a divorce adds a whole new dimension of complication. Will you be able to keep your marital home, or will you have to sell it? If you do keep it, how do you negotiate those mortgage payments? There are numerous questions that may run through your head, according to the divorce lawyers at Strange Law Firm, but these three factors are the ones to keep squarely in mind.

You Could Refinance Your Mortgage

One of the most straightforward options available to you and your soon-to-be ex spouse is to refinance your mortgage. In this scenario, either you or your spouse will be removed from the mortgage (abdicating responsibility or claim to the home) and the other spouse will be solely responsible for the new payments after the refinancing.

In most cases, this is a clean solution, but there are few things that you need to watch out for. First off, there are three factors that might disrupt your refinancing ability:

  • Income: Insufficient cash flow might make it so that you (or your spouse) can’t pay the mortgage solo. In this case, you’d have to sell. 
  • Credit: If your credit score has fallen, there’s a chance you might not qualify for a refinance. Again, you might have to sell.
  • Equity: A lack of equity may well inhibit your ability to refinance, but there are options that can help you navigate a lack of equity.

Additionally, you’ll need to remember that when you’re performing a refinance, you’ll have to remove your spouse’s name from the title so that they won’t also benefit from the sale of the home or from any equity in the home.

You Could Sell Your Home

If you don’t meet the qualifications to refinance, or you’re just done with your home after divorce, you could instead decide to sell it. There are, of course, some potential hangups to get out of the way first.

In addition to needing to split the profits from the sale, you and your spouse have to decide how to handle mortgage payments until the sale is complete. 

The process might become even more complicated if you have children. Do you want to force them to move out of a home they’ve grown up in? Where will they stay once the sale is complete? Be sure you’ve got these variables worked out in advance. 

You Could Keep Your Home As Is

Finally, you could simply keep your mortgage as is. Instead of refinancing or selling, your mortgage stays intact. You and your soon-to-be-ex will both stay responsible for payments and own the home. You’ll have to work all of that out in your divorce, of course, and you’ll also need to decide upon who will be living in the home.

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