What Happens to Mortgage Payments During a Divorce?

Divorce is never an easy process for both spouses involved. It can even be devastating to some people who had hoped to be together with their loved ones throughout their lifetime. But then again when serious problems crop up and differences can’t be settled among the couple, ending the marriage may be the best option.


Not many couples, however, are in the know about what takes place after a divorce decision is reached and the cost it entails. The process can be long with plenty of paperwork to accomplish. And then there is the negotiation part on child custody, on how to divide the properties and who shoulders the couple’s debt, if any.

The home is one major asset a married couple shares and a family values greatly. And according to family law, this one needs to be decided on fairly in the event of a divorce. A divorcing couple can choose one of these options to ensure that the decision favors both of them fairly and that they do not suffer financially.

Sell the Home

With regards to dealing with your home mortgage, the best option is to sell the residential property. If the house already has equity, it can be sold right away and the couple divides the profit equally.

This may not be easy, though, particularly if you and your family have lived here for many years and have created plenty of happy memories. It is for this reason that not many couples opt for this step.

Refinance the Home

If one of you decides to keep the house, you will need to refinance the property but this time under your name. Also, you need to qualify first with your own income.

Keep in mind that when you and your spouse still share the mortgage, both of you are still responsible for paying it every month. And when one misses a payment, the other will be forced to pay on his own. In addition, you will not be able to obtain a new mortgage unless you have your own income to qualify for a new one. Another disadvantage is not being able to rent especially since many landlords today are particular about their tenant’s financial capability.

Sign a Quitclaim Deed

You can also negotiate about signing a quitclaim deed. This deed will help transfer interest of a real estate property and a spouse who signs this forfeits his claim and right to the house.

It should be understood, though, that the name of the spouse who signs the quitclaim deed will still remain on the mortgage. Signing the deed does not remove your obligation to the home mortgage. This only means that when the other party misses any mortgage payment, you will still be held liable. This could also impact your credit score moving forward.

Rent the Home

If selling your home is not an option, you can rent it out for a specific period of time. This is a good option while you are still gaining equity on the property and it prevents a short sale as well. A short sale may cancel your debt but it can adversely affect your credit score. The cancellation of your debt will also be viewed by the Internal Revenue Service (IRS) as income.


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