The responsibility for the family home and the mortgage payments that go with it are the responsibility of both spouses until the house is sold or refinanced. Regardless of what a judge decides, it’s more likely that a divorcing couple will make a decision about the house based upon which of them can actually qualify for a new mortgage.
The easiest option to manage a mortgage during a divorce is for one spouse to refinance the house under his or her own name. The attorneys will consider the value of the home when settling the rest of the marital assets. The spouse seeking the refinancing needs to have good credit and adequate income to be in a good position to have a new mortgage approved. This works provided the couple is not past due on any mortgage payments for the last 12 months and the other spouse agrees to let go of the house.
When neither spouse can purchase the other spouse’s share of the home and the real estate market won’t support the full debt that is owed on the home, it may be possible to sell the home on a short sale. A short sale is where the bank agrees to take less than is owed on the mortgage to avoid a foreclosure. This would leave both spouses without a mortgage to worry over. The downside is that pursuing a short sale will negatively affect the credit of both parties.
Mortgage lenders will consider all assets and debts when deciding to approve a mortgage. The spouse that applies for a mortgage will need to provide the lender with all pages and schedules of the divorce decree. The lender will consider all payments for alimony and child support payments as a debt when deciding to approve a mortgage.