It is understandable for a divorcing spouse to feel sad about the prospect of having to sell their house when they get divorced. To many, the loss of a family home can feel like one more loss in a string of personal losses that accompany the end of a marriage. There may be many reasons why selling a home is a common thing for couples when they split.
Bankrate explains that couples need to think about not just their homes but also their mortgages when deciding whether to allow one person to keep a home or to sell the home in the divorce process. If one spouse ends up keeping the property and the original joint mortgage with both spouses’ names listed remains active, the bank will still view both parties as responsible for the debt, regardless of what is stipulated in the divorce agreement.
The problem with allowing a joint mortgage to stay in place exposes the person who agrees to leaves the home to credit problems and collection efforts if the spouse who kept the home fails to keep up with payments. This can happen even if the title was transferred to the remaining spouse. Any late payments, missed payments, foreclosure actions and more may be reported by the lender to credit bureaus on both parties’ records.
If you would like to learn more about what you need to know before making any final decisions or agreements on your home and finances when getting divorced, please feel free to visit the mortgage, home ownership and divorce page of our Texas divorce and family law website.