When Tennessee couples divorce, there are many decisions to make. Child support, child custody and parenting plans are just a few of the things that families face when ending a marriage. Another thing that is extremely important to address in a divorce decree is property division. In particular, what happens to the mortgage and the family home after your divorce?
Losing the family home can be devastating to your children, especially if they have grown up there and are already struggling with the change, so many parents try to come up with ways to avoid the trauma. Bankrate lists a few options that couples have when it comes to handling a mortgage after a divorce.
If one spouse wants to keep the home and the mortgage is in both names, that spouse has the option to refinance the home if they have the financial means. If you are moving out and your name is on the mortgage, you should not leave it on there and assume all will be well. If your ex stops making payments, you are still responsible to pay for a home you may not even be living in.
When there is equity in the home and you want to access it, it may be necessary to sell the home. This is sometimes the best way to shed the past and move on completely after a divorce, and both couples walk with the money they were awarded in the divorce settlement. You are free to put that money into a down payment on a new home or to use it to help get you and your kids settled.
The decision to refinance, stay or sell can be influenced by how amicable or contentious the divorce is. There are also tax implications and you may be forced to pay capital gains taxes if the amount you made was larger than a set amount. Making the right decision about your mortgage after divorce can help you find financial peace.
This information is intended for educational purposes and should not be interpreted as legal advice.