Marriages sometimes come to an end as the love fades away. But, until you find a way to divorce it, the mortgage you agreed to pay together remains your responsibility. For couples who want to untie the knot these days, the tight lending requirements and slow housing market can represent major obstacles. Divorcing couples used to be able to spit the equity of their house and purchase new separate homes after simply selling their home. That was before the market crashed.
The Mortgage Is Your Biggest Liability
Divorce attorneys are finding that they are no longer dividing up assets. Instead, they are dividing up liabilities. The largest liability the couple has to split is typically the mortgage. This is never easy. Unless you refinance or sell the house, you remain liable for the mortgage and married in the eyes of the mortgage lender.
The focus should be on finances and emotions should be put aside when considering ways to deal with a mortgage in a divorce. However, this can be difficult since people often feel like they cannot stand one more thing, like they have given up so much in the divorce process. Dealing with the mortgage can add insult to injury.
Do You Just Continue to Share the Mortgage?
You and your former spouse will have to come to an agreement if you cannot sell the home, cannot assume the loan, do not have the money to pay off the mortgage, and cannot refinance. You can try your best to make sure your ex keeps up with the mortgage payments and leave it as is. The credit records of both you and your ex will become tainted if the mortgage payments stop coming. And, creditors will come after you for money.
Do You Refinance?
So, how do you know if you should refinance your home and keep it? It can seem like an easy fix to refinance the home under the name of one spouse who will continue to live in the home. The following conditions must be met:
- The spouse must have sufficient income and credit to qualify for a refinance
- The other spouse agrees to let go of the house
- The couple is not underwater on the mortgage
It is rare for all of these conditions to be met.
Sell the Home
The easiest way to put this joint debt behind you is to sell the house immediately. This is the easy way to cut ties. The painful memories associated with the home will be left in the past, and there will no longer be a mortgage to worry about.
If this sounds like the best option to you, call Elite House Buyer today, and we can help you sell your house as fast as within the week.