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Refinancing the house during divorce

On Behalf of | Jun 4, 2024 | Family Law

Your top goal for your divorce is to get to keep the family home. You tell your ex that you would like the house, and they agree. They will take other assets – a vacation property, a retirement fund, etc. – and they will allow you to keep the home yourself.

You assume that this means nothing will change with your monthly payments or anything else. But then your ex tells you that you’re going to need to refinance the mortgage if you want to keep the house. This could be problematic because you’re trying to qualify for the mortgage on a single income – rather than the two incomes you used when you got it initially. Why does your ex want you to refinance?

They don’t want to be liable in the future

Your ex probably wants you to refinance the loan because they are technically still on the paperwork with you. You may agree to make those monthly mortgage payments for the foreseeable future. But if you ever fail to make them – for instance, if you lose your job five years from now – your ex would still be responsible. The lender could contact them and start asking for payment, even though the two of you haven’t been married in years and may not even really be in communication with each other.

But if you refinance the mortgage, that takes their name off of the paperwork and you are the only one liable for the payments moving forward. You get to keep your house, but your ex doesn’t have to worry about suddenly being responsible for financial issues down the road.

Getting divorced can be financially complex. Be sure you understand all of the steps you need to take.