An Advocate In Family Law Cases

Why refinance your mortgage after divorce?

On Behalf of | Feb 6, 2024 | Divorce

Not everyone keeps their home after divorce. Many couples will decide to sell the house. Often, their reasoning is that they need to divide marital assets. If they sell their home and make a profit, then they just have to split the profit in half and the process is done.

But there are also many cases in which people want to keep their marital home after they get divorced. Perhaps they have an emotional connection to it that they don’t want to let go. Or perhaps the housing market is just very competitive, they’re happy that they already own a home and they don’t want to lose that benefit. One person may decide to buy out the other person’s share, for instance, and then keep living in the home as the new sole owner.

Refinancing during this purchase

If you’re interested in doing this, it may be wise to refinance your mortgage. One reason for this is just if you need additional capital to purchase your ex’s share of ownership in the property. You may need a new loan.

But even if the loan was exactly the same, it’s important to refinance because it disconnects you from your ex in a financial sense. Even if you got divorced, if you were still both on the mortgage paperwork, your ex would be responsible for those mortgage payments. You could agree to make them, and things may go smoothly if you did. But if you ever missed a payment, the mortgage lender may still contact your ex, even years after the divorce. If you refinance, your ex removes their name and they have no liability.

Figuring out how to split up property is a complicated part of divorce. Those involved must know what legal steps to take.