After a divorce, there is a critical question to answer about who gets to keep the marital home. In most cases, only one person is going to keep the property while the other is going to leave. However, it is wrong to assume that it is possible to assume the mortgage after a marriage comes to an end. Generally speaking, mortgage products initiated after 2008 do not allow for this to happen.
In the event that a mortgage can be assumed, a lender is going to want to do a credit check of the person assuming it. If a person is allowed to assume a mortgage, it isn’t always the best decision to do so. This is because there may be fees to pay, and whoever keeps the property will need to pay for its upkeep. Depending on how much it costs to pay a mortgage and other associated expenses related to owning a home, it may be best to simply sell it.
It could also be better to refinance the mortgage instead of assuming the current loan terms. This is because the new loan will be amortized over a period of 30 years, which means that the monthly payment could be lower. A lower monthly payment could improve liquidity in the immediate aftermath of a divorce.
A house is one of many items that may need to be split between a formerly married couple during the property division process. Individuals might choose to sell the home and split the proceeds or buy the other partner out. It may also be possible for both parties to the marriage to stay in the home and sell it at a later date. An attorney might be able to help an individual obtain a favorable outcome in a settlement.