As you go through a divorce, you may decide that you don’t want to lose your house. For instance, perhaps your spouse has proposed selling the home and splitting up the money that you earn in the sale. After all, you both have a right to the house because you are co-owners, so this is an easy way to divide marital property.
However, you may want to keep the house, so you could offer your spouse other assets in return. Maybe you have financial assets like investments or a retirement account. Your spouse can take those, and you can take over as the sole owner of the home. This means that you have still properly divided your assets during the divorce.
But even if your spouse agrees to such an arrangement, remember that you may still need to refinance your mortgage.
Why is this necessary?
The reason you have to do this is because the mortgage company doesn’t care if you’re divorced or not. If you and your ex are both on the mortgage paperwork, you’re both responsible for the payments. Your ex probably will not want to continue being a cosigner on a mortgage loan because they may be responsible for paying your mortgage later—if you begin to miss those payments.
This can make things a bit more complicated. You and your spouse may have applied for the mortgage together, using both of your incomes. You now have to apply for the refinance with just one income, so there can be some question of whether or not you’re qualified, depending on the stipulations from the lender.
As you go through this process, be sure you are well aware of all of your legal rights and the steps you’ll need to take during property division.