After the love is gone and the divorce process begins to move forward, it is time to think about property division. This often includes a marital home (among other assets and debts). Here is the question: Which partner will stay in the home and which one will leave?
Breaking up the mortgage after a divorce is easier said than done. While there are many ways this can happen, the situation is not the same for every couple in this position.
Since this is joint debt, it can be hard to decide which steps to take. Here is the best thing you can do: Sell the home and move on. By doing so, neither party has to worry about being tied to the home in the future. Furthermore, any proceeds from the sale of the home can be divided appropriately.
There are other options, such as refinancing the loan under the name of one partner. This is a good idea, but doesn’t always work out. In order for this to be a solution, the couple must not be underwater on the loan. Furthermore, the spouse keeping the home must have the credit score and income to qualify. And of course, there is the question of whether or not the other party will agree.
The question of how you break up the mortgage after divorce is one that many couples face. There are a few strategies for doing this, all of which should be taken into consideration. What matters most is that both parties understand how the property is being divided.
Source: Bankrate, “Breaking up the mortgage after divorce,” accessed Nov. 24, 2015