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Divorce and your mortgage

There is nothing simple about divorce. Whether you have been together for five years or 25, the process of splitting assets and dividing your life can be a huge headache without the right help. Per the Centers for Disease Control and Prevention, over 800,000 couples in the United States filed for divorce in 2014. Because close to 60 percent of the population also owns a home, this makes for tough financial decisions for couples ending their marriage.

 

There are several ways to handle the mortgage during a divorce, and every situation is unique and requires a customized plan. These are a few options available.

 

Refinance your mortgage

 

If you own a home and both names are on the mortgage, the easiest solution may be to refinance and remove one spouse from the loan. That way, only one of you is responsible for paying the mortgage. If you lack the income to pay the mortgage, do not have the credit to borrow the money on your own or do not have enough equity to refinance, you may want to consider other options.

 

If your home does not have enough equity for a refinance, you may choose to remove the name of one spouse without a total redo of the loan through a HARP refinance, a FHA streamline refinance or VA refinance loans.

 

Sell the home

 

It may be easier to just cut your ties and move on. If you have enough equity to pay off the home, and neither one of you wants to stay, you have the option to sell the property. This may be difficult if you have children that you do not want to uproot.

 

Keep the house on your own

 

If you lack the credit or equity to get a loan but want to keep the home, you have the option to stay in the house and keep both names on the loan. This means you are both liable for the payments, and your divorce decree should include specific terms about who pays and when.

 

Managing a divorce takes skills, knowledge and experience. If you are divorcing and want your assets, including your mortgage, divided fairly, speak to an attorney today.

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