When preparing for divorce in Tennessee, you might have many things on your mind. All this can make it easy to overlook details that can impact your lives post-divorce. One of the things you should think about as you prepare for divorce is what to do with your mortgage.
3 realistic options
If you know you are headed for divorce, discuss what to do with your mortgage with your spouse, as the family home is often one of the most valuable marital assets. However, while you might have been able to jointly cover the costs of the mortgage and the upkeep of the house, it might not be feasible when only one of you is responsible. As you prepare for divorce, you have three options to consider, which include:
- Sell the home and divide any profit left after the mortgage is paid off
- Keep the home as a joint asset that can be used as an investment property
- Buy out your spouse or negotiate for the home with another property of equal value then refinance the mortgage in your name
Understanding your options
Selling the home and splitting the profits is the easiest choice, as you will both begin your new life after divorce free of this major responsibility. If you choose to jointly keep the home as an investment property, you will need to be committed to paying the mortgage each month and the upkeep costs. This might be hard if you have a high-conflict relationship. If you keep the home alone, you must refinance your mortgage in your name. To do this, you will need to reapply and show you qualify for the new mortgage.
Deciding what to do about your mortgage before you begin the divorce process can help you avoid making costly errors later. Sit with your spouse, discuss the options available and be realistic about the decision.