One of the biggest stressors in divorce is affordable housing. Most couples do not want to lose their existing low mortgage interest rate, which is usually below 3.5%. I totally get that. Usually, the mortgage holder will not let one spouse assume the existing mortgage (although it is not as rare as it used to be so it should be researched as an option.)
So, what can you do if a spouse cannot assume the mortgage or cannot or does not want to refinance? On option I see attorneys negotiate is to allow one spouse to keep the home and take responsibility for the existing mortgage, real estate taxes, insurance and all other maintenance and expenses of the home. If proper language is written in the separation (settlement agreement), then the non-home spouse will not have the existing mortgage count for purposes of qualifying for their own mortgage. Sounds great, right? WRONG.
The non-home spouse is STILL responsible to the mortgage company should the spouse keeping the home default on the mortgage. This is why the non-home spouse should never sign a quit-claim deed signing over the marital home UNTIL his or her name is off the mortgage.
The upshot? Jointly owning a home after divorce creates a lot of other issues and pitfalls for the unwary that need to be understood and addressed. I encourage you to seek the advice of a Certified Divorce Financial Analyst such as myself during your divorce so you make informed financial decisions about ALL aspects of your divorce.
