Added to the many emotional challenges of a divorce, some vital financial decisions must be made. Homeowners in Connecticut have to try and put emotions aside when considering what to do about the mortgage in a divorce. Although one spouse — often the mother — may want to keep the house for the sake of the children, it may not be the most appropriate financial decision.
Keeping the house will require that spouse to refinance the property in his or her own name, and obtaining a mortgage on just that person’s income may be difficult. Furthermore, the costs of maintaining a property may also be unaffordable on a single income. It is usually suggested that selling the home and splitting the profit is the best option, particularly if there is equity in it. This may be the most practical way in which to deal with a mortgage.
An agreement to allow an ex to stay on and make mortgage payments may not be wise because the mortgage holder will hold accountable any person whose name is on the loan. Signing a quitclaim deed may be an option, but it is a risky move that may have more cons than pros. These matters can become complicated, and decisions made at this time can impact on the post-divorce financial security of both spouses and may warrant professional advice.
Connecticut couples who are considering divorce may want to resolve issues related to the family home and the mortgage before filing for divorce. Professional advice and guidance are available from experienced divorce attorneys who can assess the circumstances of each party and suggest the best manner in which to handle the mortgage and other financial issues. With the support of their respective legal representatives, spouses may be able to reach amicable financial agreements before tackling other issues, such as child custody and visitation.
Source: Time, “What Happens to Your Mortgage in a Divorce”, Ashley Eneriz, March 29, 2016