What Happens to the Mortgage After a Divorce?
What Happens to my Mortgage?
Divorce and Your Mortgage
If you have a mortgage and you are facing a divorce you might wonder what your options are to deal with the situation. There are several ways to resolve the debt on the home and it is important to consider what is best for your situation.
Options to Deal with the Obligation
1. The most obvious is to sell the home which will allow the mortgage to be paid off. It is one of the easiest way to get a fresh start. Depending on your divorce settlement, the equity will be split.
2. If one of the parties is retaining the home, the home can be refinanced by the person keeping the home. This will allow a fresh break for both parties as the prior mortgage will be paid off and the obligaton to pay will be over too. This can be a challege as the person keeping the home will need to qualify with their income.
3. The spouse can buy the other spouse our of the home's equity and keep the mortgage. The person keeping the house is responsible for the mortgage payment however this does not take them off of the commitment to repay. This is the greatest risk possible and should be considered carefully. If the payments are not made by the owner, it could impact your credit.
Which option is right for you? We are here to discuss your options with you so you can see what is best for you.