Divorces create a litany of complications for thousands of Pennsylvania residents every year. One of the most complicated aspects of a divorce involves how to deal with outstanding mortgages on the marital home. Fortunately, there are some options available to you if when dealing with a divorce and a mortgage.
Refinancing your mortgage
One of the most common steps that couples take after a divorce is to refinance the mortgage into the name of the partner who keeps the house. This ensures that the spouse that moves out of the home is free from any financial responsibilities associated with the mortgage. Refinancing after a divorce is a wonderful option, but typically requires an amicable split.
Selling the home
In more contentious divorces, judges often require that the divorcing couple sell the home, pay off the mortgage, and then split the proceeds. If neither partner can afford the mortgage payment on his or her own, it is often the only viable option.
Buying out your ex
This option is a bit trickier but is a great option for couples when one party can afford to keep the home. Under this option, the partner remaining in the home pays the partner leaving the home for their share of the property.
For instance, if you have a home that is worth $200,000, you owe $100,000 on the mortgage and you have $50,000 in home equity, you can buy out your ex’s share for $25,000. Take note, this option only works if the partners agree on a 50/50 split after the divorce.
The variables that go into deciding who gets the marital home make divorce even harder. However, having a financial plan can provide stability to both spouses as well as their children.