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Your house in a divorce

On Behalf of | Dec 4, 2019 | divorce and family law |

For Georgia couples that have decided to call it quits on their marriage, the list of issues that they must address can seem to go on forever. If the pair purchased a house together, deciding what to do with that house is just one more thing on their list. In fact, it ends up being two more things on the list because it is not just the house that must be addressed but the mortgage as well.

As explained by Money.com, simply stating that one person will keep the house and make the monthly mortgage payments in no way is sufficient to remove financial responsibility for the home loan for the other person. Some people may think that by signing a quit claim deed handing over full ownership of the property to their former spouse, they are free of all liability. This, however, is not true if the original joint mortgage remains in effect.

A lender will look at the names on the active loan to determine who they may pursue for repayment on the mortgage. Any missed or late payments may be reported against the credit histories of both parties if both names are still on the loan, regardless of who is supposed to make the payments per the divorce decree. The only way around this is for the person who wants to keep the house to get a new mortgage in their name only.

Bankrate suggests that couples may agree to a time limit for one spouse to refinance the loan and, if at the end of that limit the loan is not approved, the house will be sold.