Mortgages, Property Division Can Be Divorce Complications
When a couple starts divorce proceedings, they often wonder what will happen with their family home. This is a place that many memories have been formed, and a person might face both emotional and financial issues when handling the division of a family home.
While the decisions surrounding property division of the family home might be tough, it is important that there is a clear resolution. A couple might think that it is just acceptable for one spouse to maintain mortgage payments and take care of the house. However, if one spouse doesn't assume all liability of the property, the other spouse might still be liable if the one spouse doesn't make mortgage payments on time or goes into foreclosure.
This can have unintended, devastating effects on both spouses and their financial futures. It might be wise to seek out options to have one spouse assume all liability of the house.
Speaking with an experienced family law attorney can help a person explore different options for keeping the house, selling it, or transferring the liability and mortgage to the other person.
Besides selling the house, a couple might be able to refinance the house under just one spouses name, or do a mortgage assumption. Both of these options depend on the mortgage lender approving just one person supporting the mortgage. There are also options with the deed to transfer any interest from one person to another, but it might not include the transfer of all liability, leaving one person vulnerable to credit crippling foreclosure or default notices.
Source: Loan Safe, "Mortgage Options While Going Through a Divorce," Evan Bedard, July 14, 2013