The biggest asset you share with your spouse is probably your home — so it’s important to make the right choice about how to handle the mortgage in the split.
The good news is that you have several different options for your mortgage to consider. The bad news is that your finances may limit which of these are really practical:
You can sell
Selling your home may be your best option, especially if you and your spouse can’t agree on who gets to keep the property or if the mortgage looks like it might be a stretch once you’re on your own.
Emotionally, this can be painful — but splitting the equity can also afford you a lot of freedom as you start over.
You can refinance
If the mortgage is in both your names, it’s going to be necessary to refinance. That removes your spouse’s name from the mortgage entirely.
If you intend to keep your home this way, it might be wise to review your credit score and finances with your bank’s loan officer to make sure that you can afford the new rate. Since you have to use some of the equity to buy out your spouse’s share, however, you’ll have to come to an agreement with your spouse about the home’s value before you move to refinance.
You can postpone the decision
If your split with your spouse is amicable, you may be able to postpone the decision for a few years. This can be particularly advantageous if you have children. Remaining in the family home can provide the children with some much-needed stability right after the divorce. If your kids are close to graduating school, remaining in the home for a year or two can allow them to finish school with their friends.
The only problem is that you’ll remain financially entangled with your spouse for a while after the divorce is over — and you’ll have to work out an agreement about repairs and changes that might affect the property’s value.
Deciding how to divide a lifetime’s worth of assets can be somewhat overwhelming. Fortunately, a family law attorney can help you work through your choices and decide what makes the most sense for your situation.