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4 options for your mortgage during divorce

The biggest asset many people own is simply their home. It may also be a liability, depending on the current market and their mortgage. Either way, it's the biggest financial question during a divorce.

So, what should you do with the home? Here are four common options:

  1. Sell it. This makes things easy on both of you. Once you find a buyer, you can just split the money you earn or the debt you retain in half, and you're done.
  2. Keep it. This is not without risk. You can keep the mortgage, in both of your names, even though you're divorced. The risk is that, if you need your ex to make payments or help you make them, and he or she fails to do so, you're both still on the hook financially.
  3. Refinance it. If one person wants to keep the house, it's best to have that person refinance it so that it's only in his or her name. Granted, that person will have to qualify for the loan and be able to make the payments, but this removes the financial responsibility from the other party.
  4. Rent it. In some cases, the market is in a temporary dip. If you sold the house, you'd both have to pay money. If you wait three years, you think you'll both earn money. To make it affordable, you may resolve to keep the home together but rent it out for a few years so that you can sell it after the market goes up.

Which option is right for you? That depends on your situation. Just remember to carefully consider all of your legal options when dividing property.

Source: My Mortgage Insider, "Mortgage Options That Help When Facing Divorce," Craig Berry, accessed Jan. 19, 2018

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