If you are getting divorced, one of your goals may be to ensure that you get to keep the family home. You may even be willing to give up other assets, like savings accounts or retirement accounts. Perhaps you just don’t want the hassle of moving after the divorce, or maybe you love the home that you’re in.
If you do this, it’s important to note that you may need to refinance your mortgage. You need to consider this carefully because it can change your financial situation.
Why do you need to refinance?
There are two main reasons why you may need to refinance. The first is that you and your ex likely signed your mortgage papers together. Even if you get divorced, that doesn’t break your contractual obligation. As far as the mortgage lender is concerned, you are both still responsible for those payments. So your ex would want to remove their name from the paperwork and ensure that they weren’t held liable for missed payments in the future.
The second reason is that your income may be reduced. Perhaps you had two incomes when you initially applied for that mortgage, but now you’ll just have one income after the divorce. This can sometimes make it difficult to refinance because you may not be able to afford a mortgage to pay for your own home. The lender will want to know about your current financial position.
As you can imagine, this makes your situation very precarious and complex. While dividing assets and planning for your future, it’s important that you understand exactly what legal steps you can take.
