Divorce can be complex and emotional, often involving a series of tough decisions, including handling marital assets. Properties, such as the family home, can be easy to divide but also have complications. Real estate usually has a shared mortgage that can come with various legal and financial issues.
Deciding what to do with the property and the mortgage can cause conflicts between the divorcing couple. The court can provide solutions if the involved parties refuse to keep the home and the debt, such as selling the house to divide the proceeds or designating it to one party who would also shoulder the mortgage. If you agreed to receive the property and be liable for the mortgage, it could be wise for you to refinance it based on the circumstances.
Even if your divorce concludes with a document designating the property as yours, your former spouse can still hold responsibility for the debt if you do not remove their name from the mortgage agreement. This arrangement can leave loose ends legally and financially, which is why divorce decrees may list refinancing the mortgage as a requirement.
What challenges come with refinancing the mortgage?
Refinancing might only be an option under the right circumstances. The court might not consider it if you do not meet income limits and other qualifications to refinance the loan. If so, you and your former spouse can set up an agreement indicating that you will continue paying for the mortgage until you become capable of refinancing it.
These options could be feasible on a case-to-case basis. Sometimes, other factors can come into play, leading to financial and legal restrictions. If further complications arise, seeking legal counsel is best so you can get help determining your options and navigating the process appropriately.