How To Protect Yourself When Your Spouse Keeps the Home
If you and your spouse decide that he or she can keep the marital home, you should make sure your interests are protected. Remember that any credit lines you share will affect both of your credit reports, so you need to make sure your spouse will keep paying the mortgage on time. If you cannot be sure of this, it may be time to get your name off the deed.
Get Compensated for Giving Up the House
You may agree to let your spouse keep the house you share. However, you need to make sure you get compensated with other assets. For example, you might get to take the retirement account you share, or simply more of your liquid assets, in an amount about equal to the home’s value. Make sure you come to this agreement in writing before claiming your spouse can keep the home. An experienced lawyer can ensure that you do not miss out on any assets that belong to you after divorce.
Make Sure the House No Longer Affects Your Credit
If there is equity in the home, your spouse can refinance in his or her own name. This will mean you have nothing to do with the home anymore, so if your spouse misses a payment, your credit will not be negatively affected. Your spouse has to have good enough credit and income to qualify alone, though.
If refinancing in your spouse’s name is not a possibility, and your name has to stay on the mortgage, you should make sure your spouse is unlikely to miss a payment. For example, you can stipulate that if a payment is missed, the home must be sold soon after that. Either that or it has to be refinanced. Either way, you do not want your name on the deed anymore if your spouse is going to be missing payments since this will unfairly affect your credit.
Share the Mortgage
The only other thing you can do is help your spouse with the payments when necessary. You may be able to work out a compromise in which you get a different asset, such as a car or some furniture, in exchange for paying toward the house when your spouse cannot pay the entire mortgage. Of course, you can also split the mortgage every month, wait for it to earn equity, and then share the profits when you sell the home.
Consider Selling the House
If none of these plans work for you, it may be necessary to sell the house as soon as possible and then simply split the profits. You may have to take a loss if you have no equity, but the alternative is to have your credit affected when your spouse misses payments or stops paying altogether. You do not want a foreclosure on your record, especially when you are not even getting the benefit of living in the house after divorce.
No matter what turns out to be best for you, it is important that you hire a lawyer to get professional legal advice. Call Brian D. Perskin & Associates P.C. for accurate guidance when dividing your assets.