Sharing a mortgage with one’s spouse may be perfect when times are good. However, when divorce is on the table and the time has come for a property division settlement to go forward, a shared mortgage can become quite imperfect — and complicated. When it is time to decide if one spouse is keeping the family home, it is imperative for both spouses to understand the effects of their decision.
When one spouse decides to stay in a home, the person who decides to keep the house likely needs to have the mortgage put in her or his name. This means he or she must qualify for the mortgage without his or her spouse’s income, which can be difficult when a home was purchased based on two incomes. In addition to qualifying for a mortgage, a spouse remaining in a family home must also be able to afford all of the other costs of homeownership, such as insurance and taxes.
In some cases in which one spouse cannot afford the home by him or herself, a deal can be with the other spouse. Some choose to accept equity in the home in lieu of other assets, while some even negotiate temporary financial assistance from a former spouse that will be used toward paying for the home. When making either type of deal, it is important to look at the long-term consequences of the deal before signing an agreement.
Property division can become complicated, especially if both parties cannot agree on the fate of the family home. When it comes to property division agreements in general, the home will likely play a major role in how other property is divided during the divorce. Fortunately, experienced Pennsylvania family law attorneys can help spouses make decisions that will benefit them for years to come.
Source: The New York Times, “Divorce and the Shared Mortgage“, Lisa Prevost, Oct. 30, 2015