Pennsylvania spouses who have a mortgage loan and are getting a divorce will need to investigate strategies for dealing with the mortgage. For example, will one spouse assume the mortgage in his or her own name? Will the spouse who keeps the home need to refinance? These and other questions will need to be answered as a part of the divorce process.
Here are a few home mortgage strategies spouses may want to consider:
It may be easiest to sell the home: If you and your ex-spouse are willing, the best option is to sell your home, split the home equity and split whatever profits come from the sale.
Let one spouse take over the payments: If one spouse wants to keep the home and take over the payments, he or she needs to refinance the home with a new mortgage in his or her own name. Obviously, this will only be possible if the spouse has a financial situation that is secure enough to get such a mortgage. The new mortgage will also need to provide enough capital to buy out the other spouse's share of any home equity that has accrued.
What if the mortgage is underwater? If the home is worth less than the amount owed, then selling the home might not be an option. In this case, the couple might want to rent the home until the real estate market situation improves. The other option is to perform a "short" sale on the home if the mortgage lender approves.
Every divorce and every financial situation is different. As such, you and your soon-to-be ex will want to examine your circumstances carefully to determine the most appropriate way to divide your family home.
Source: Money, "What Happens to Your Mortgage in a Divorce?," Ashley Eneriz, accessed March 30, 2018