If you or your spouse has filed for divorce, you can expect decisions regarding your marital residence and mortgage to be tackled. It is important to decide how to deal with your mortgage during a divorce. If you are like many couples, you probably bought a house together and carry a huge balance on your mortgage. And you may want to keep the house for your children; however, you are not sure how to separate the mortgage obligation.
Although it is normal for parents to ensure their children have a place to stay even after their parents’ divorce, keeping the marital home for their sake and forgoing other assets is not a good solution. If you want to fully understand what’s important for your children, you consider working with a child specialist. Although decisions during divorce usually carry serious emotions with them, you need to stay objective, so you can make the right choices for your future and your children’s. When deciding whether to let go of the marital home or let a spouse keep it, you must consider if the spouse who wants to retain ownership of the house can afford to do so. If the house has equity in it, how will the spouse who will move out of the house get their share of the equity? A sandy divorce lawyer and a neutral financial expert can help you reach fair agreements and sort through the options. The following are possible options you have with regards to your marital residence during divorce:
Refinancing the Mortgage
If you choose to refinance the mortgage, the spouse who will keep the house must qualify for the loan on their own. The other spouse will be removed from the obligation. Before you choose this option, consider if the spouse has sufficient income to qualify for the new mortgage. If this spouse is counting on spousal support and child support, determine which terms will this income be considered by the lender. Your attorneys can help you explore options. For instance, a spouse can offset the equity against other marital assets or make a cash buyout of the equity.
Selling Your House
You and your spouse can decide to sell the marital home. If it has significant equity, it can give you both some funds to start over.
Staying With Your Existing Loan
Even if only one of you continues to live in the house, you can choose to stay with your existing loan. With this option, you don’t have to refinance the house.