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What are the options when a divorcing couple has a mortgage?

On Behalf of | Jul 18, 2023 | Divorce

Property division can be one of the most challenging aspects of a Florida divorce. The difficulty of coming to an acceptable solution for both parties can be complicated and it is essential to know the options.

Addressing a mortgage in a divorce

Divorcing couples remain obligated to pay a mortgage if their names are both on it. Still, there are strategies people can use to avoid long-term problems related to it.

Refinancing the loan could be helpful by changing the title from a joint ownership to an individual ownership. Once a person qualifies, they might get a better rate than they had before.

One person can buy out the other to keep the home. A new mortgage using accumulated home equity can potentially put money in both parties’ pockets. There are also attractive home equity loans. This can avoid paying cash to buy out the spouse.

Of course, there is the alternative of selling the property. This could be the wisest financial choice for people who cannot get a mortgage on their own or do not want to retain a property that was meant to be a marital home.

A simple way to deal with a mortgage is to leave it as is and continue paying it. This is beneficial for people who are on good terms at the end of their marriage. Finally, a lender could let one person move forward with a loan assumption where that borrower is responsible for the mortgage and the other is removed from the loan.

People need to think about their mortgage during a divorce

Simply because a couple is getting divorced, it does not eliminate their responsibility to pay a mortgage. During the case, it is important to be aware of every potential issue and take steps to address them – especially financial ones that are often forgotten.