If you are getting a divorce, you may already know that you have several tasks ahead of you that must be dealt with before your settlement becomes final. One of the largest and challenging assets to deal with when it comes to property division is the marital home. Deciding what happens to it often presents enough of a challenge, but if you are like other Kentucky couples, this task is complicated by the fact that you have a mortgage loan to contend with as well.
Most Kentucky couples have three primary ways to deal with the home and a mortgage attached to it. One party may refinance the mortgage loan in his or her name alone if it is possible to qualify for financing. One of you may sign a quitclaim deed giving up your rights to the home, but you remain responsible for the mortgage loan with the other party. The final option, which is often the best one for most people, is to sell the home, pay off the mortgage and divide any remaining funds.
Considering the housing and lending markets these days, none of these options may work, at least not right away. This often stems from the fact that the remaining balance on many people’s mortgage loan is more than the home is worth. You could attempt a short sale if your lender agrees, but some couples are coming up with other solutions such as renting out the home or remaining in the home together until a better solution presents itself.
Determining the best option for dealing with the marital home and the mortgage loan attached to it may require some research. Whatever choice you make could have a profound effect on your financial future. Considering the ramifications of this decision, it might benefit you greatly to discuss your options related to the marital home, along with your other property division concerns, with an experienced divorce law attorney.
Source: Time, “What Happens to Your Mortgage in a Divorce“, Ashley Eneriz, Accessed on May 11, 2018