Helping You Create A Brighter Future

When you got your mortgage, the interest rates were much more favorable than they are now. The value of your home was also a lot lower just because the entire market was lower.

The thing is that you and your spouse bought the home together. Now you’re talking about getting divorced. Because of the higher value of the home and the higher interest rates, you know that getting a new mortgage would vastly increase your monthly payment. But can you keep your mortgage if you want to keep your home?

You probably need to refinance

Unfortunately, the fact of the matter is that you’re probably going to need to refinance and get a new mortgage. This will be based on the interest rates that are currently being offered.

The reasoning here is that two people who are on the same mortgage are both responsible for those payments, whether or not they are married. If you keep the house as part of the property division process, but you don’t change the mortgage, your ex would technically be responsible for those payments. They may not want that type of liability or the risk that you would miss payments in the future.

Does the home value matter?

You may think that the increase in the value of your home isn’t going to change anything. If you’re just buying out the old mortgage, you’re still paying the lower price. You’re just buying your own home from yourself and your ex. This puts the home into your name.

But it can be problematic. Say that your home has doubled on the market since you bought it. Your spouse is probably well aware of this, and they consider that the true value of the house. If you sold it to a third party, they would have to pay much more than simply the remaining value on the mortgage that you already have.

In other words, your spouse may stand to make a lot more money if they sold to someone else. For this reason, they may want you to offset this cost if you’re trying to keep the house. This could mean paying them more money or giving them other assets.

No matter how it works out, it’s going to be complicated, so be sure you are well aware of all of your legal options.

 

 

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