When dividing assets in a divorce, your mortgage is a major consideration. Here are three typical ways to handle the mortgage:
Refinance the Mortgage
One partner can refinance the mortgage under their name, buying out the other partner’s share. This option requires the refinancing partner to qualify for the mortgage on their own, which will depend on their financial stability and creditworthiness.
Sell the Property to Your Partner
If one partner wishes to keep the home, they can buy the other’s share. This requires the purchasing partner to secure financing independently, assuming they meet lender criteria for affordability and credit.
Sell the Home and Split the Proceeds
If maintaining the mortgage is too burdensome, selling the home and dividing the proceeds provides a clean break. This is practical if neither party can afford the mortgage solo, or if both parties prefer to start fresh.
Choosing the right option involves careful consideration of each partner’s financial situation and long-term goals. Consulting with financial advisors and legal counsel can provide guidance tailored to your specific circumstances.
This is where an experienced mortgage broker can really add value.
