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How to handle a mortgage during a divorce

On Behalf of | Oct 17, 2023 | Property Division

Lending Tree reported mortgage debt as of 2023 in the U.S. was $12.01 trillion. Many couples going through a divorce share a mortgage, making it one the major financial aspects to address

Handling a mortgage during a divorce requires careful planning and communication.

Assess your options

Begin by examining your options for the shared home. You can choose to sell the property and split the proceeds, one spouse can buy out the other’s share, or you can continue co-owning it post-divorce.

Agree on ownership

If you decide to maintain joint ownership, reach an agreement on how to manage the mortgage. Decide who will continue living in the house, how you will make the mortgage payments and how you will handle any necessary repairs and maintenance. If you will buy out the other’s share of the property, you may need to refinance the mortgage into your name.

Regardless of whether one of you will keep the home or you will sell it, you will need to also agree with your spouse on a fair market value for the property. This may require a professional appraisal to ensure both parties receive an equitable share.

Create plans for home management

You will need to decide how you will handle maintenance and repair costs while the home is for sale or once one spouse takes over ownership. You also must address the tax implications of your mortgage arrangement. Mortgage interest deductions and property tax deductions may change with divorce.

Communication is key

Throughout the process, maintain open and honest communication with your spouse. Clearly discuss your intentions and expectations regarding the mortgage, as well as any potential changes that may arise.

Managing a mortgage during a divorce can be complex and emotionally charged. Addressing it directly can help you navigate this challenging situation with greater ease and protect your financial interests.