If you and your spouse own a home together and have made the difficult choice to end your marriage, you know that you may well lose your home in the process. This can be a very hard thing for people to accept as they often attach a lot of meaning to a family home. While navigating the emotional aspect of how to address a home in a divorce, you should carefully assess the financial facts as well.
Homes and home loans
The Mortgage Reports reminds homeowners that homes and home loans are essentially very different entities. Even if one spouse signs a quit claim deed turning over all ownership of a home to the other person, they may remain liable for the mortgage in the eyes of the lender should the joint loan remain active. This can happen even if a divorce decree stipulates that only one person is supposed to make the mortgage payments.
New loans are important
The only way for one spouse to prevent themselves from being pursued for repayment by a mortgage lender is to require the person who keeps the home to get a new loan in their name only. This may be challenging for a newly divorced person as credit and income tend to drop at this time. This is one reason why many couples end up selling their houses when they get divorced.
If you would like to learn more about how to assess whether or not you or your spouse may keep your family home after your divorce, please feel free to visit the divorcing homeowner’s page of our Texas divorce and family law website.