Deciding what to do with a house in a divorce

On Behalf of | Dec 4, 2019 | Family Law |

Tennessee couples who own their homes and who decide to get a divorce know that they will have to choose what to do with their home among all of the other decisions they will have to make as they figure out how to separate their joint lives. It is a common practice for couples in this situation to sell their marital homes, but that may be difficult if the home is lacking in equity, as explained by SoFi. 

Selling a house in a divorce often allows both people to use the funds to pay off debt and walk away from their marriage clear from financial encumbrances that bind them together. In some cases, one person may want to stay in the house. This might be one way of keeping some stability for any children the couple has or it might simply be due to the emotional ties the person has to the home and the work they have put into it. 

The Mortgage Reports recommends that before agreeing to allow a former spouse to keep the house, the existing mortgage should be addressed. Assuming that the mortgage on the home is in both spouse’s names, this must be paid off and a new mortgage in the name only of the person who will keep the house should be obtained. If this does not happen, the person who leaves the house may still be viewed as financially liable for the property in the eyes of the lender. 

The bottom line is that banks view mortgages and homes as two separate things. They are also not interested in the details of a mortgage decree but focus instead on the names on a loan.