As a divorce unfolds, each party involved has to make very difficult decisions. One of those difficult decisions can be what to do about the house and the shared mortgage. Virginia couples in the midst of a property division agreement or who are concerned about finances may want to weigh the options before deciding what to do about that shared mortgage during a divorce.
If one spouse wants to keep the home, that spouse will most likely have to have the mortgage put in his or her name alone. This requires deep insight into whether that person can afford it. Part of affording it means qualifying for a solo mortgage and also being able to afford the extra costs of homeownership without the other spouse's income.
As for the spouse who wants to leave the home, getting his or her name off the shared mortgage is imperative. Being left on the mortgage can spell financial disaster if the other spouse does not pay or has unforeseen financial difficulties. Also, being on the shared mortgage can impact that spouse's credit and ability to get his or her own mortgage for another residence.
Deciding what to do with the house after a divorce may not be an easy decision. While selling and splitting any equity may seem the simplest resolution for Virginia couples, one party may not want that as an outcome. Regardless of which spouse stays or which spouse wants out, the details of a shared mortgage and options need to be clear so each party can move forward and begin a life financially independent of each other.
Source: The New York Times, "Divorce and the Shared Mortgage", Lisa Prevost, Oct. 30, 2015