Divorcing with a mortgage and what happens to the home

On Behalf of | Oct 19, 2023 | DIVORCE - Property Division |

When couples marry, they often take the time to create a home to call their own. Whether that means building a house or purchasing a house or condominium, a home tends to be a very valuable and sentimental piece of property. As such, when a couple decides to divorce, it is likely that they will fight over who gets to remain in the home.

Divorcing with a mortgage

Dealing with a marital home during dissolution can be challenging. However, before it gets too messy, it is important that you consider your options before diving into a course of action to address this property division issue.


When it is agreed that one spouse will take over the ownership of the marital home, it is likely that the mortgage will need to be refinanced. If it is a joint mortgage, it will need to be refined to a new mortgage that has only one of their names on it.

It should be noted that if both spouses’ names are on the title, both will still benefit from the sale and equity in the home. Thus, if refinancing is your course of action, it is important to remove the other spouse’s name from the title with a quitclaim deed.

Sell the home

Another option is to sell the home and split the profits. This might be appealing, especially if each spouse determines that they cannot afford the home on their own; however, it is important to consider the costs associated with this sale. This includes realtor commission, the costs associated with making it more attractive to buyers, taxes associated with real property transfer and capital gain taxes.

Pay ex their share of home equity

The final option is to buy the other spouse out. This is when the spouse who seeks to keep the home pays their ex their share of the home equity. This could be accomplished through a cash-out refinance, home equity loan or home equity line of credit.

No matter what option you decide to move forward with, it is important to understand the financial implications. This includes taxes, impacts on your credit and the costs associated with evaluating your home equity.

As such, it is important to consider your legal rights and options during a divorce. A legal expert can help you determine how best to deal with property division issues and any other divorce issue that comes up.