How to handle the mortgage when you divorce

On Behalf of | Jan 5, 2021 | Property Division |

Once you take the emotional side of things away from the equation, a Texas divorce involves divvying up assets and debts so that the two of you may go your separate ways. When you and your ex own a home together and share a mortgage, it may be one of the most substantial assets with which you must contend.

According to Bankrate, the options you have when it comes to your mortgage may depend on your income, how much equity you have and whether either of you wishes to keep the home you once shared. Regardless of whether you plan to sell the home or have one of you keep it, it is wise to figure out how much equity you have in it.

Determining equity

In the absence of a sale, a good way to gauge how much equity you have in your home is to have an appraisal performed. Many former couples fight over appraisals, so it may benefit you to either agree on an appraiser together or each finance your own and then see how much they differ.

Determining whether to sell or refinance

If neither of you want to stay in the house you once shared, you may want to place it on the market. The money you make when you sell should pay off what remains of your mortgage debt. If anything remains afterward, you and your ex may split it and use it to move somewhere else.

If you want to keep the house and your ex does not, or vice versa, the one who wants to keep the home should refinance the mortgage. This may involve requalifying for the mortgage without the other party’s income.

Whatever you decide to do with your mortgage, anticipate your decision having tax and credit implications.