Divorce is a challenging time for many people, and it can be even more challenging when trying to navigate assets (such as a home) so it’s important to consider how mortgage decisions can be impacted. These are some solutions and advice I offer on the mortgage side of the transaction:
- Understand your options: If you own a home together, there are a few options for handling the mortgage. One spouse could sell the home and divide the proceeds, one spouse could keep the home and use our spousal buyout program to obtain a mortgage in their name (I can do this up to 95% of the home value to include all debt payouts as agreed in their agreement), OR you could continue to co-own the home and both contribute to the mortgage payments.
- Consider the financial implications: Each option has financial implications to consider. Selling the home could result in a loss if the home has decreased in value since it was purchased. Spousal buyout of the mortgage in one spouse’s name could result in higher monthly payments if that spouse has a lower credit score or income. Continuing to co-own the home requires a high level of trust and communication between both parties.
- Title: Never agree to take your name off title if it is still on a mortgage. This results in error and difficulty when selling, refinancing or renewing the mortgage. It’s also a vulnerable position as one spouse is still responsible for the debt. (It appears on your credit bureau but you legally don’t own the property any more.)
- Keep emotions in check: Divorce can be an emotional time, but it’s important to approach mortgage decisions with a clear head. Making decisions based on emotions rather than financial considerations can have long-term consequences.
- Timing: Timing is another crucial piece when it comes to selling a home during a divorce. Your realtor should work with you to determine the best time to put your home on the market, taking into account their specific circumstances and any legal requirements.
- Pricing: As above, determining the right price for a home can be challenging, but it is especially important during a divorce. Your realtor can help you understand the market conditions and price your home appropriately. And lastly:
- Communicate: Communication between all parties is key during a divorce.
Asset-matters during a divorce can be a challenging and emotional process, but we’re here to provide valuable support. By keeping these things in mind and seeking professional advice, you can make informed decisions about your mortgage options during a divorce.
Contact me for more information or if you have any questions!