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To keep your home after divorce, do you need to refinance?

On Behalf of | Mar 27, 2024 | Divorce

One of the most common options that couples choose for their home during a divorce is to sell it. They may still owe money on the mortgage, but the home may have gone up in value. They can sell it, pay off the mortgage and split up whatever money remains.

There are those who want to keep the house, or at least situations where one spouse wants to keep it rather than sell it and move. When dividing marital assets, they may exchange assets so that one person takes over as the owner of the house and the other person gets something like a vacation property, and investment portfolio or a retirement fund. If you decide to do this and you’re going to keep the house, do you need to refinance your mortgage?

Defining liability for future payments

Yes, you probably do need to refinance your mortgage. If both you and your spouse are currently on the mortgage papers, you are both liable for future payments. That doesn’t change just because you get divorced. If you miss payments five years from now, the mortgage lender could begin contacting your ex to try to get payment from them. Your ex will want you to refinance to put the home in your own name so that they can get a clean break and they don’t have to worry about unexpected debt in the future.

That said, refinancing can be complicated, especially when going from two incomes to one. Take the time to carefully consider all of your legal options throughout your divorce.