Couples who have decided to end their marriage may encounter many different issues that require negotiation: child support and custody, spousal support and division of assets. Many Massachusetts divorcing couples who own a family home together find a particular set of challenges in negotiating who will retain control of the property and then what options exist for that person regarding the mortgage, assuming he or she has decided to not sell the home. A mortgage expert provides valuable information for divorcing individuals in this position.
Some divorcing couples opt to retain the original joint mortgage. However, ex-spouses must fully trust each other for this option to work, as a payment default could lead to damaged credit for both parties. To avoid such a consequence, many people choose to refinance the mortgage in their name only.
Divorcing individuals may also consider the option of assuming the original mortgage, provided it carries a good rate and payment options and that it allows for a loan assumption. With this option, one person’s name is removed from the loan, yet the other person does not have to refinance the existing loan, therefore retaining the favorable terms of the loan. Divorcing individuals who are considering pursuing this option should first check with their lender to ensure that their loan offers this feature. They can find this information by looking at their original promissory note. In order to make the best decision for one’s particular circumstances, people are smart to fully examine the costs and time involved in assuming a loan versus refinancing.
Like all issues that must be discussed during this time, deciding what to do with the family home post-divorce can be stressful. Divorcing couples may feel overwhelmed as they not only consider how various options will affect their financial future, but also deal with the emotions that typically arise during such discussions. A Massachusetts family law attorney can be a valuable resource to help guide people through mortgage decisions and many other important issues during the divorce process.