As you and your spouse move toward divorce, you may have one goal: keeping your home. Maybe you simply don’t want to move. Perhaps it’s the home you’ve always dreamed of owning, and you’re not ready to leave it. Or maybe the housing market is prohibitively expensive, and you feel fortunate to already have a home, so you want to maintain that stability after your marriage ends.
If you and your spouse own the home outright and it’s paid off, it simply becomes part of property division. For example, your spouse may prefer to take other assets, such as a vacation property, retirement accounts or investment accounts. If the values are comparable, you may agree to keep the home while your spouse keeps other assets, making property division relatively straightforward.
What if you still have a mortgage?
For many couples, however, the home is not fully paid off—they are homeowners, but they still have a mortgage.
In this situation, you’ll likely need to refinance the mortgage. Without refinancing, your ex would remain legally liable for future payments, as getting divorced doesn’t remove their name from the mortgage paperwork. To fully assume ownership and remove your ex’s financial obligation, you’d need to apply for a new loan in your name, refinance the mortgage and take over as the sole homeowner.
This process can be challenging, especially if you initially purchased the home based on two incomes and applied for the mortgage jointly. You’ll need to determine if you can qualify for the same mortgage on your income alone, which may be more difficult.
Navigating property division
These are just some of the complexities involved in property division during a divorce. Be sure you understand all of your legal options.