Mortgage Solutions

When you are going through a divorce or separation, one of the most contentious items to be resolved is the fate of the marital home. Even if your settlement agreement states that your husband will be responsible for the mortgage, if you and your husband signed the original mortgage papers, this won’t remove your liability in the eyes of the lender.

To remove this liability, the marital home will either have to be sold or the mortgage will need to be refinanced or assumed.

Option 1: Sell Your Home

One of the simplest ways to remove your liability from the mortgage when getting divorced is by selling the marital home. The proceeds will be used to pay off the existing mortgage and whatever is left over can be split between the two parties.

This means that after your separation, neither of you will have to worry about the other not making mortgage payments, maintaining the home or paying any taxes and insurance.

Option 2: Buy Out Your Spouse

If you have the financial ability and want to keep your marital home, you can buy out your former spouse. This can be an expensive option since you will also have to start making the mortgage payments yourself.

If you want to go this route, there are two ways of doing it:

  • Assume the existing mortgage
    By assuming the existing mortgage, you become solely responsible for making the mortgage payments on your original term. This means you will need to complete an assumption agreement and a release of liability. You will also have to provide financial documentation to prove to the lender that you can pay the mortgage. However, not all mortgages are assumable and you will first have to contact your lender to see if this is a viable option.
  • Refinance the mortgage
    If you want to keep the home but you don’t want to assume your current mortgage term, your other option is to refinance your mortgage. Although you will still have to buy out your ex-spouse’s equity, refinancing can give you more flexibility. It will allow you lower your payments by refinancing at a better mortgage rate.

When To See A Mortgage Broker

When facing a divorce or separation, it is always best to sit down with a mortgage broker to discuss your mortgage payments. They will be able to outline viable options, provide information on current mortgage rates and walk you through different scenarios to ensure you are making the best financial decision available to you.

Want To Learn More?

To learn more about your mortgage payment options after a divorce or separation, contact our office at 1-800-381-1303 or fill out a contact form.

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