3 ways to handle a joint mortgage after divorce

The process of splitting your life is difficult. Divorce means dividing assets, time with children if you have them and even friends you gained as a couple. One of the more important long-term aspects of divorce is how you handle your mortgage.

If the names of both spouses are on the loan, what should you do to prevent being saddled with debt that is not yours in the future?

1. You may choose to sell the house

Perhaps the simplest option is to sell the house if you have enough equity in it to cover your costs. If you are upside down and do not have the cash to pay off the remaining balance, or you do not want to force your children to move during a time that is already stressful, this may not be an appealing option to you.

2. Have one person refinance in their own name

You also have the option to completely refinance the mortgage and remove one name from the loan. This is problematic if the person who stays in the house does not have the financial means to qualify for a loan the size of the house. If you choose to stay in the house and want to refinance, your ex must also be willing to let go of it for you to refinance.

3. Rent the home

If neither one of you can afford the home on your own but you do not have the equity to sell it, you may also choose to rent it out. This can be problematic if there is animosity between you and your ex as it is essentially a joint asset. Some choose to rent out their homes until they have the equity needed to sell or refinance.

Protect your future

Dividing your assets can be a complicated process, particularly when you are already dealing with the emotional upheaval of a divorce. If you are considering divorce, we encourage you to contact an attorney immediately so you have someone protecting your interests through every step.