As you separate all the important things from your life together as amicably as possible, deciding how to handle the mortgage can be a unique problem on its own. When you buy a home and both your names are on the loan, the last thing you are thinking about is a possible divorce.
You have several options when it comes to splitting the mortgage after a divorce, and there is no right solution that works for everyone.
Sell the house
Perhaps the easiest way to deal with a joint mortgage after divorce is to sell the family home. Many couples want to avoid this option if they have children because they hate to introduce more changes to their lives. This can also be a problem if you are upside down in your loan and do not have the cash to make up the difference. If that is your situation, you may need to consider alternatives.
Refinance the mortgage
If one spouse decides to stay in the house, then you can refinance the loan in his or her name alone so that you are not responsible for payments in the future and any defaults or late payments will not affect your credit score. For this to be a viable option, the spouse choosing to keep the house must be able to afford it with her or his own income.
Keep the home together
If you are upside down in the home and cannot sell, neither one of you can qualify for the loan on your own, or you simply want to keep the house, you have the option to keep the mortgage how it is. This can present its own set of problems if one spouse chooses to default in the future or does not keep his or her end of the deal. Although this is a risky option, if you and your ex are on friendly terms, it may work.
Every situation is unique, and there is not a one-size-fits-all option for handling a mortgage during divorce. As you navigate the waters of separating your life, it is important to make the right decision when it comes to your interests and your family home.