Deciding what to do with your home is usually one of the most significant financial decisions that you and your spouse will make during your divorce. A big mistake that too many people make is not getting their name off of the mortgage and the deed if their spouse keeps the house.
Sometimes a husband or wife will agree to stay on the loan and help out their spouse with the payments until they're able to refinance or afford the mortgage alone. In some cases, it may just seem like too much trouble to take your name off the loan and the title even though their spouse is now paying the mortgage alone.
What If Your Ex Can't or Won't Refinance?
However, what happens if that spouse becomes unemployed, suffers another type of financial setback or just decides not to pay anymore? You could be stuck with the full mortgage payment, and your credit could take a big hit if you can't afford that.
The first thing you'll want to do is talk with your family law attorney. You can go back to the judge in your case to ask for a court order requiring your spouse to refinance the loan in his or her name only. However, when someone is financially unable to do that, a court order won't do much good.
If your spouse has the money to refinance, however, the original judge doesn't still have jurisdiction in your case; you may have to sue your ex-spouse to get him or her to do that.
Selling the Home May Be the Best Option
If you can persuade your spouse to sell the home with you, you'll free yourself of the mortgage and maybe make a nice profit that the two of you can divide. You may be able to convince a spouse to part with a home by offering to pay the closing costs.
Often it's best to sell the home as part of the divorce. That way you're not going back to court months or years later and paying additional legal costs. Deciding what to do with the family home can be an emotional decision. However, it has to be made rationally. There's a lot of money riding on it.
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