Divorcing couples are faced with many issues, including legal questions about property, such as who will retain possession, and dividing liability, equity and payment of the mortgage loan. These questions have serious legal and financial implications for both spouses. There are a variety of methods to share equity in the house. In Virginia, there are steps divorcing couples can take to transfer mortgage liability.
3 Ways to Transfer Mortgage Liability
- Sell the property. Selling the house is one possibility, although a buyout might be preferable. In a buyout, the person awarded the property refinances the mortgage and pays the spouse their share of the equity.
- Refinance the property. The spouse awarded the home may be able to refinance the mortgage into their separate name.
- Defer sale to a mutually agreed upon date. During a depressed real estate market, selling the home or a buyout can be deferred to a future date. Divorcing couples who agree to this are hopeful that prices will increase enough at a particular point to provide enough equity to break even or generate a profit.
Depending on your individual situation, selecting a different method to transfer liability for the mortgage may be the right choice for you. It is always a good idea to discuss options with an attorney before making any financial decisions about what to do with jointly owned property.