Married to the Mortgage: How Divorce Changes Home Ownership
According to Wikipedia, the average marriage lasts eleven years. And while there is no real metric to measure the divorce rate, guesstimates suggest it is around 50%. Lower income couples have a higher divorce rate and the younger you get married, the greater your chance for the marriage ending. And you can serve divorce papers via a Facebook message.
While many of the higher statistical divorces end amicably, it may be due to the lack of financial entanglements, such as a mortgage. In order to own a home, you need a mortgage. But what happens when the mortgage is shared by a couple in the throes of divorce? It is not as easy to answer as it once was.
How Divorce Impacts the Mortgage
If the average mortgage lasts thirty years and the average marriage lasts eleven, you can see the disconnect. For some areas in the country, simply selling the house is not a viable option. In most instances, the house would need to be in good repair and the market would have to sell at a price that would satisfy the lender. This means that the divorce is more about the division of liabilities rather than assets.
There may be no other option though. In order for one half of the couple to own the house, the lender would have to consider the income (and debt) of only one person on a mortgage that may have relied heavily on both incomes and a combined lower debt. Refinancing will not be permitted if the house is underwater, a post-2008 term that suggests the balance on the loan is greater than the home’s worth. And the court may not agree either.
It is becoming rarer, but in some instances, an assumption of the mortgage is possible. You can always stay married in mortgage only. This can be a complicated approach to the problem of home ownership when one of the owners is not living there. Both parties will need to make payments and failure to do so may do more than violate the terms of the divorce agreement: It can also damage your credit.
One thing you need to be certain of is the wording on the decree. In order for one now-ex spouse to get a new mortgage or even to rent an apartment while looking for a new home, the divorce needs to show who remains on the mortgage. That thirty-year decision may have ended badly, or at least not the way you hoped, but untangling your marriage to the mortgage will allow you to unpack your new life without worries.
How can we assist you today?
On behalf of The Jones Group @ Sunriver Realty
Nola Horton-Jones, Principal Broker/Realtor | ABR, C-RIS, e-PRO, GREEN, RSPS, CCIM Candidate
Bryce Jones, Broker/Realtor | ABR, CRS, e-PRO, GREEN, GRI, RSPS, SFR
The Jones Group @ Sunriver Realty | 57057 Beaver Drive | Sunriver, OR 97707
Mobile: 541-420- 3725 | Mobile: 541-420- 4018 | Fax: 541-593- 5123
Licensed in Oregon