Disagreements are common in a divorce. While alimony and child custody tend to be the most heated, what to do with a family home can be a major source of stress. Who stays in the home can affect everything from each spouse’s cost of living to child custody arrangements. There are three basic arrangements that can be made, when one spouse wants to retain the property, for a family home during a divorce.
In some divorces, only one spouse stays in the family home but both ex-partners remain on the mortgage. This arrangement works in situations where both parties trust each other implicitly. That’s because a payment default can be extremely damaging to both parties (it could potentially mean losing a residence). The second option is to refinance the mortgage in one spouse’s name only. A third option is for one spouse to assume the loan.
There are a lot of misconceptions about assuming a mortgage. Assuming a loan means that one person’s name is removed from the mortgage without the need for refinancing. This may be the preferred course of action when the current terms of a mortgage, such as a low interest rate, would be better than refinancing terms. In addition, the fees to assume a loan are usually lower than refinancing. Assuming a loan can require a significant investment of time and energy.
When making decisions about property division during a divorce, each spouse has the right to support and guidance from an attorney. It’s the responsibility of a lawyer to help their client obtain favorable terms whether issues are settled during mediation or during a court trial. Even if a divorce is amicable, it’s important for each person to have representation when important decisions are being made.