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What happens to the house after divorce?

When a couple decides to get divorced, they have to negotiate a divorce settlement to divide their assets and property. This can be a very difficult time for many couples, especially if the couple owned a home together.

It can be a complicated process determining what should happen to the house after the divorce has been finalized. It is important for couples getting divorced to understand their mortgage options before they decide what to do with the family home.

Couples should be aware that they will both remain liable for paying their mortgage, even if their divorce decree dictates that one party will be responsible for the mortgage. Unless the couple sells the property or removes one spouse's name from the mortgage, the lender can still hold both spouses liable for any missed mortgage payments or foreclosure proceedings.

There are a few options couples getting divorced should consider when determining what to do with their house:

  • Sell the house: this is the easiest way to remove both names from the mortgage. In addition, the couple can split the proceeds from the sale. However, selling the house all depends on the current housing market so if selling the home isn't an option, couples may need to consider the other options listed below.
  • Refinance the mortgage: if one spouse wants to stay in the home, he or she should try to refinance the mortgage into his or her individual name. The spouse maintaining ownership often pays the their ex half of the house's equity. Couples considering this option should be aware that lenders consider several different factors before approving a homeowner to refinance their home so this is not a guaranteed way to remove one person's name from the mortgage.
  • Mortgage assumption: this option is not available to everyone but if it is, individuals should seriously consider it. Mortgage assumption allows one person to assume the mortgage and the liability but lenders must first agree to this.

Couples getting divorced should consult a divorce attorney to discuss all of their options when determining what to do with the house because everyone's situation is unique and may require additional attention.

Source: Loan Safe, "Mortgage Options While Going Trhough a Divorce," Evan Bedard, July 14, 2013

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DeShon Laraye Pullen PLC and founding attorney DeShon Laraye Pullen received many prestigious honors, including: Small Firm of the Year, Family Law Litigator of the Year, selection to Arizona Super Lawyers and a Superb, 10.0 Avvo rating.

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