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Refinancing your mortgage after a divorce

On Behalf of | Mar 15, 2024 | Family Law |

If you are getting divorced, you may simply decide to sell your family home. You and your spouse do need to divide your marital assets. One way to do this is by selling your house and then splitting up the money that you make.

However, you may decide that you would like to keep the home, and your ex may agree to take other assets – like a retirement account or an investment portfolio – that have a similar value. But this doesn’t necessarily mean that you can just stay in the same house without changing anything. It may be time to refinance your mortgage.

A question of financial liability

In fact, it is probably your ex who will most adamantly want you to refinance the mortgage. The problem is that both of you are on the mortgage paperwork from when you were married. This means that you are both liable for making those mortgage payments on time.

You may agree to do so as you take over ownership of the house after the divorce, but if your ex stays on the mortgage with you, they would still be liable for any missed payments. 

Say that you lose your job in 10 years and start missing payments. Your lender could contact your ex, who hasn’t even been married to you in a decade, demanding payment. But if you refinance, then you can put the mortgage in your own name. This makes you the sole owner of the house and prevents any future complications. 

Determining what to do with the house is just one of the decisions you have to make during a divorce. Be sure you understand all of your legal options at this time.