If you and your spouse own your home together, it’s considered a marital asset. If you get divorced, you both have a claim to it, so it goes through the property division process. In many cases, couples simply sell the house and then split the proceeds from the sale.
However, you may want to keep the home. If you and your spouse own it outright, you can trade them other marital assets instead. For example, if you have a $200,000 house and a retirement account with $200,000 in it, you might exchange the retirement fund for the house. This is just an example, but it illustrates how property division can be straightforward if you’re willing to trade other marital assets to become the sole owner of the home.
Refinancing if you have a mortgage
On the other hand, you may still have a mortgage on the house. You can still request to keep it in the property division, but remember that this likely means you’ll need to refinance that mortgage. Essentially, you would need to apply for a new mortgage loan on your own to buy out your ex’s share of the house.
This step is important because the individuals listed on the mortgage papers are responsible for future payments, regardless of their marital status. Your mortgage lender isn’t concerned with your divorce decree—they only care about getting paid.
In other words, if you don’t refinance and then miss payments, even if it’s five or ten years in the future, your ex could still be held liable. By refinancing and getting a mortgage in your own name, your ex is removed from the equation and has no future liability.
Moving through a divorce
You can see how property division may get very complex. Be sure you understand the steps you need to take to legally protect yourself.