Divorce is a frustrating and emotional thing to go through. It can also cause strain on your finances. Any divorcing couple should take stock of their shared assets, including the home mortgage. You might be wondering how to handle your shared real estate during your divorce and who will be responsible for payments. Here are some tips on how to get you through the divorce without financial devastation.
While it may not be the easiest emotional decision to make, selling your home can be the most financially viable option. Sentimentality will make this decision challenging, particularly if there are fond memories associated with the place. However, selling your home and dividing the profit can be the simplest and financially beneficial way to resolve the issue.
Determine if one person can handle the payments
Sometimes one spouse is set on keeping the home. This can only be accomplished if the spouse in question qualifies for refinancing with his or her individual income. Be aware that keeping your name associated with the mortgage loan will make you responsible for missed payments. It will also make it difficult for you to get a separate mortgage.
Buy a short sale
If neither of the above options is feasible, you may want to pursue a short sale. This is one thing you can do if you owe more than your house is worth. A short sale is accomplished by making an agreement to release your home to your mortgage lender for less than the value of your property, cancelling your debt. This has negative consequences on your credit score as well as tax implications.
Live together for the time being
Most divorcing couples cannot imagine continuing to live together, although it works in certain instances. If you can manage to peacefully live together, you can end up saving money and delay the sale until the market goes up.
Consult an attorney
Divorces are often contentious and multiple roadblocks may come up. Maybe your spouse is unwilling to sell the house or come to any other agreement. Resolving these complications may be easier with the help of a divorce attorney.
It is best to settle your mortgage issues before the divorce is finalized. While no one who purchases a home and enters a joint mortgage with a spouse plans on getting divorced, these things happen. Make logical decisions to protect your assets, and seek advice. An attorney experienced in family law and real estate can assist you in understanding your rights and prevent you from making unwise decisions.