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Divorce and Mortgage Payments

Divorcing partners discussing options for putting their home on the market; divorce and mortgage payments concept.

The often challenging process of divorce can take an emotional and financial toll on all involved. For many spouses seeking a dissolution of their marriage, the disposition of the family home––and the question of who will be responsible for paying its mortgage––looms large in divorce negotiations and court proceedings, as well as in the spouses’ minds. To learn more about divorce and mortgage payments, reach out to an experienced New Hampshire family law attorney with Friedman & Bresaw, PLLC. Schedule an appointment by calling (603) 707-4800 today.

Does My Husband Have To Pay the Mortgage if We Divorce?

According to the American Bar Association, both parties may be responsible for home mortgage payments if the property is jointly held. In some cases, the divorcing couple may agree that one spouse will take on the responsibility of the mortgage payments as part of the settlement. In others, ownership of the family home, and responsibility for its associated expenses, may be determined by a New Hampshire judge as part of the court-ordered division of assets during divorce proceedings. 

Regardless of whether the arrangement is agreed upon by the spouses during their independent divorce negotiations or established by the court, its terms will need to be documented in the divorce decree or separation agreement. Importantly, while those legal documents may stipulate who is responsible for the mortgage, they do not release the other party from their obligation to the mortgage lender. If the person the divorce decree identifies as responsible for maintaining the mortgage fails to make the required payments, those non-payments can impact both parties’ credit scores and financial standing.

How Do You Handle a Mortgage During a Divorce?

Many divorcing couples find it challenging to hold a productive discussion about divorce and mortgage payments. The reallocation of marital property and household expenses can prove difficult to approach. However, clear, practical communication directed towards collaborative problem-solving can play a substantial role in mitigating both the potentially negative financial impacts of a divorce and the stress both parties are likely to be experiencing. These steps can guide you through the process:

Open Communication

Maintain open and honest communication with your soon-to-be ex-spouse. During divorce proceedings, an open discussion can help to establish each partner’s current and anticipated financial situation. A clear understanding of income and expenses will help divorcing spouses to make realistic choices regarding their former family home. 

Joint Ownership and Liability

If both spouses are listed on the mortgage, they both are liable for the debt until the property is refinanced or paid off. Even if the divorce settlement assigns the mortgage to one party, the lender may still hold both accountable for any missed payments.

Refinancing the Mortgage

If one party takes over the mortgage, they may want to consider refinancing the loan in their name. Refinancing pays off the existing mortgage and creates a new one. The spouse seeking to refinance the home will need to qualify for a new loan based on their creditworthiness and financial stability, so this arrangement may not always be an option. When effective, however, refinancing can remove the other party’s liability and provide a clean financial break. The Consumer Financial Protection Bureau provides a helpful guide to checking individual credit history that an ex-spouse or soon-to-be ex-spouse considering a refinancing option may want to explore in order to make an informed decision about their likelihood of approval. 

Sale of the Home

Sometimes, selling the family home may be the most practical solution, and may even be ordered by the judge in a New Hampshire divorce case. The proceeds of the sale can be used to pay off the existing mortgage, and any remaining funds can be divided by the former spouses according to the terms of their divorce settlement. An experienced family law attorney with Friedman & Bresaw, PLLC may be able to help you negotiate the terms of a divorce settlement in line with your financial situation and personal priorities.

Can I Remove My Ex-Husband From My Mortgage Without Refinancing?

Generally speaking, the approval decision for a co-signed mortgage is made on the basis of underwriting calculations that take all parties’ credit scores and combined incomes into account. A change in signatories would invalidate the premises on which the loan was originally approved, and so many lenders are understandably reluctant to remove any co-signer without a refinancing process that involves a separate evaluation of the refinancing party’s individual credit score. 

If the goal is for one spouse to take over sole ownership of the home and concomitant responsibility for its mortgage, some options to pursue include: 

  • Taking over the mortgage: Some lenders may allow another party to assume the responsibilities of the mortgage. However, that spouse will need to provide their creditworthiness and ability to make the payments. 
  • Negotiation with the lender: In certain situations, negotiating with the lender may provide options to modify the loan terms or explore alternatives, including the removal of either ex-spouse from the mortgage. However, the outcome of such negotiations is not guaranteed. Sometimes, lenders may be reluctant to make exceptions.
  • Selling the home: Putting the house on the market may allow both parties to move on without the financial burden of maintaining a mortgage on the family home. Selling the home eliminates the need for either spouse to remain on the mortgage, and proceeds from the sale can be used to pay off the couple’s shared debts.

Is Divorce Considered a Financial Hardship?

Divorce can create financial problems for many people. A typical divorce may involve:

  • Dividing assets
  • Paying legal fees
  • Establishing separate households

Each of these factors can strain finances, to varying degrees. Depending on the circumstances, some divorces can create a serious financial strain, leading to hardship for one or both of the former spouses. Some points to consider include: 

Financial Impact

Divorce can lead to a major reduction in household income. Formerly shared financial resources are now divided between two households. In many cases, this can lead to increased financial stress and challenges. This situation can be especially challenging when one spouse has been financially dependent on the other.

Legal Fees and Expenses

Divorce can lead to a major reduction in household income. Formerly shared financial resources are now divided between two households. In many cases, this can lead to increased financial stress and challenges. This situation can be especially challenging when one spouse has been financially dependent on the other.

Impact on Credit

Financial decisions made during a divorce can impact the credit scores of both parties. Late or missed payments on a mortgage due to miscommunication or simple lack of funds can have long-term consequences for creditworthiness.

Division of Assets

The division of assets, including the family home, can directly impact the financial well-being of both parties. For that reason, both parties will want to carefully consider the feasibility of financing approval as well as the resources available to maintain a mortgage in order to make decisions that set them up for a strong financial future. 

What Are a Few Post-Divorce Financial Strategies?

As divorce changes their financial landscape, separating partners will need to strategize for the future. Most ex-spouses can start by reassessing their financial situation and creating a new budget that reflects a post-divorce reality. Establishing or replenishing an emergency fund to cover unforeseen expenses may be a good idea, especially for a former spouse who will be assuming sole responsibility for a formerly shared mortgage. Spouses who are continuing mortgage payments, will need to make sure to assess the home’s ongoing maintenance costs and property taxes. Additionally, spouses who previously contributed in-home labor rather than developing careers outside the home may wish to consider exploring opportunities for education or career development to enhance their future earning potential. Implementing these strategies can help you shape a secure and fulfilling financial future. 

Reach Out to Our New Hampshire Family Law Attorneys

Navigating divorce and mortgage payments demands a strategic approach to guarantee the financial well-being of all parties. As you make this important transition, you will want to maintain open communication, establish a crystal-clear understanding of joint liabilities, and consider options like refinancing or selling the home. While divorce can create financial hardships, proactive planning can help you make a seamless transition to your post-divorce financial life. Schedule an appointment with Friedman & Bresaw, PLLC, by calling (603) 707-4800.

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About the Attorney
Jesse Friedman

Jesse has personally represented thousands of clients throughout the State - from juvenile delinquency offenses through homicides. He has extensive trial and litigation experience and has obtained favorable outcomes for thousands of clients throughout the years.

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