A home is an amazing investment, and many married couples purchase together to get better interest rates. Putting both your names on the mortgage is usually a good idea, until you decide to end the marriage and do not want to be held responsible for the loan.
There are several options you can choose from when it comes to handling your mortgage after a divorce, and you and your ex must choose which one is right for you.
Refinance with one name
If one of you plans to stay in the home and has the individual income and credit to obtain a loan, then you may want to simply refinance the house in that spouse’s name. Remember that interest rates and costs may have changed since you first took out your loan, so you could end up with worse terms than you had originally.
Sell the house
You may decide to just make a clean break and sell the house and split the profits. This works unless you are upside down in the house and do not have the cash to make up the difference. It is also difficult when the market is upside down and you have to sell your home for less than it is worth.
Options to try when you cannot sell
If you cannot sell the house and must look at other options, you may try one of three things. First, you could short sell the home, although this may affect your tax filings and your credit score. You can rent the home if you feel you can work together enough to be successful. You can also continue to live together until the house sells, although this only works when divorce is amicable.
Protect your interests
If you are getting divorced and are concerned about being responsible for a home you no longer live in, it is wise to meet with an attorney to discuss your options today.