Before tying the knot, you may have heard the statistic that half of all marriages end in divorce. Despite your initial inclination to disregard such a notion, it’s plausible that later down the road, you might find yourself contemplating the dissolution of your marriage. If you and your spouse have decided to split and own a home, you’re still financing; knowing your financial obligations is crucial. When you purchased your home, you may not have been able to afford the total cost of the property out of pocket. When this is the case, you may need to pay a mortgage. One of the most critical decisions when divorcing is who gets to keep the house. Your options may depend on how the home is financed and titled. Please continue reading to learn how divorce will impact your mortgage and how a knowledgeable Bristol County Division of Assets and Debts Lawyer can help you today.
How is a Mortgage Divided in a Massachusetts Divorce?
Firstly, a mortgage is an agreement between you and a lender that allows you to borrow money to purchase or refinance a home and gives the lender the right to repossess a property if you fail to repay the money you’ve borrowed. When you take out a mortgage to purchase a property and are still paying it off, you’ll have to determine how it will be divided during your divorce. In Massachusetts, assets and debts are divided according to equitable distribution laws. This means if you took out the marriage when you were already married, this would be considered marital debt. As such, the mortgage would be split equitably between you and your spouse. Therefore, both parties may remain responsible for paying off that debt. It’s crucial to note that if the home was purchased before the marriage, it still may be considered marital property. This is the case if the title was changed to include both parties.
What Options Are Available?
In some cases, divorcing couples with a joint mortgage decide to refinance to a new mortgage only in one of the spouse’s names, as opposed to both. This ultimately releases one spouse from responsibility for that mortgage, as they will be removed from the loan. This option is great for spouses who wish to remain in the marital home. However, they must also have their partner’s name removed from the title, and if they have equity in the house, the spouse remaining in the home must buy out the other’s interest in the property to retain sole ownership. Another option that may seem obvious is selling the house and splitting the profits. Although this may seem attractive, you should consider the costs, including the relator’s commission, the costs of sourcing up the place, and the tax implications.
If you’re getting divorced, please don’t hesitate to contact a determined lawyer from The Law Offices of Cynthia L. Hanley, P.C., who can help you resolve disputes on how the marital estate should be split.
