What Happens to Your Mortgage in a Divorce? Divorce is a messy and emotional situation, and it can wreak havoc on your finances. One of the major assets that couples share is their home mortgage. Handling your 100 percent refinance correctly in the divorce will help you and your ex go your separate ways on the right foot financially.
Selling Is Often the Best Option Your best option is usually to sell your home. This is easiest done if you have equity in the house, and the house can be sold and the profit split. Emotionally, selling will not always be the easiest, especially if you raised your children in that home or have other fond memories. From a financial and logical standpoint, selling the home and splitting the profit is the cleanest way to deal with the mortgage. Decide if One Spouse Can Take Over the House Payments If one spouse wants to keep the home, then they can refinance the home under their own name.
In order to do this, they will need to qualify for the refinance with just their income. It is not wise or advised to trust that your ex will make the mortgage payments. Even if your name’s not on the deed, as far as the mortgage company is concerned, you and your ex spouse are both fully liable for the mortgage costs each month. Therefore, if your ex misses a payment, or if something happens to them, such as disability or death, you will still be held accountable for the payments.