Many Ohio couples going through divorce face complicated questions about how to handle the marital home. This is often one of the largest and most sentimental assets involved in the property division process. In some cases, the spouses decide to sell the home and divide the proceeds as part of the divorce settlement. However, in other cases, they reach an agreement for one spouse to keep the home in exchange for other marital property.
When a mortgage remains on the home, it can be important to sort out this question before finalizing a divorce settlement. Both spouses could maintain the joint mortgage while agreeing that only one is responsible, but it’s important to note that this does not bind the lender. If a former spouse fails to keep up with the payments, the other ex-spouse could see serious credit consequences. One of the most common options is to refinance the home in the name of only the spouse who will remain there after the divorce. However, some people may wish to have the remaining spouse assume the current mortgage instead.
Assumption costs are often lower than those associated with refinancing. Furthermore, the assumption process can allow people to retain favorable terms contained in the original loan. However, not all loans are assumable; in general, loans issued before 2008 are more likely to be assumable than those issued after that time. In addition, all of the documentation necessary for a refinance is generally also needed before the lender will approve an assumption.
Divorce is a time of serious emotional and personal changes, but it also carries major legal and financial consequences. A family law attorney can work with a divorcing spouse to handle key questions about the marital home and other property division issues, working to achieve a fair settlement.