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What Happens to Your Mortgage in a Divorce?


Marriage is not easy, and frankly, neither is divorce. Divorce can be especially frustrating when there’s a home involved.

When there’s a marital home involved, things can get complicated and messy. What should you do with it? There are several options, but will your spouse agree with you? If you can come to an agreement quickly, then that will make all the difference in a divorce.

What Are My Options?

If you have a home, you have three main options:

  • Sell the home and split the profits with your spouse.
  • Have one party keep the home and relinquish the mortgage to them.
  • Maintain the mortgage jointly and use the house as an investment property.

What Should I Consider?

One of the biggest issues with wanting to keep a home is money. It all boils down to: Can you afford it?

Houses are expensive to buy, maintain, and repair. You will need to assess your monthly budget and determine if you can afford the mortgage on your own. Keep in mind that you will also be responsible for additional housing costs, such as maintenance and property taxes.

If you decide to keep the home, you will likely have to requalify for the mortgage, which means you will have to prove that you can afford the home alone. If you don’t have the income, then you won’t be able to qualify. Keep in mind that  mortgage rates have been soaring in the past few years, so your monthly payments could go up significantly if you refinance now.

Even though you may want to keep the marital home for sentimental purposes, it may be better to sell the home and split the proceeds. Selling the home is the easiest way to wipe your hands clean of the mortgage as well as your ex-spouse, especially if you don’t have any children together.

Don’t forget about taxes. Home sales are subject to state and federal taxes. It’s better to sell the marital home while you are still married. That’s because the first $500,000 of equity is exempt from capital gains tax. Once you get divorce, only the first $250,000 of equity is exempt from capital gains tax.

If you and your ex decide to jointly maintain a mortgage, keep in mind that both of you are liable for payments. If a payment is missed, both of your credit scores will suffer. This could eventually lead to default and foreclosure.

Seek Legal Help

Dealing with a home during and after a divorce can be a major headache. Make sure you understand your options and work to negotiate with your spouse.

When dealing with the marital home, know how it will affect your credit score, taxes, and other elements. Count on Fort Lauderdale divorce lawyer Edward J. Jennings, P.A. to guide you through the process and give you solid advice. Call 954-764-4330 or fill out the online form to schedule a consultation with our office.



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