In most marriages there is a marital home and it’s often the largest, or one of the largest assets. Particularly if there are kids, one spouse often wants to keep the marital home.

Unfortunately, most lenders will not simply allow one spouse assume the existing mortgage. If both spouses are on the mortgage, refinancing will probably be required to take one spouse off the mortgage? Why is that important? Because no matter what the settlement agreement or divorce decree says, if you are on a mortgage, the lender WILL hold you both responsible for the mortgage payments. The mortgage will also continue to show up on your credit report as an obligation which may keep you from getting a loan you need for other purposes.

Refinancing comes with a cost. Fees for refinancing can be 2-4%, interests rates may have increased and your credit score may have gone down which in most cases, will make the overall cost of the mortgage higher. Refinancing is a time when you want to be smart and you want to learn about what mortgages are all about so you know what to ask when you shop and what to consider. Money magazine put out a great article with lots of things to consider when you are in the process of refinancing, especially with regard to the pros and cons of keeping your mortgage payments low (which helps your cash flow) vs. paying less for your home over to entire term of the mortgage.

See my other articles discussing the marital home and divorce: