July 15, 2021

You can’t divorce your mortgage…

COVID-19 has done more than kill people, shut down schools, destroy small businesses, and instill fear in the populace. It also caused the divorce rate to rise.

Between April and June 2020, the divorce rate in the U.S. rose by 34%. This increase is attributed to a combination of fear, financial strain, illness, death of loved ones, isolation from extended families, homeschooling children, increased alcohol and drug use, and too much togetherness for those in lock-down.

Going through a divorce is unpleasant at best, and when there’s a house to “split,” it can be even more unpleasant.

If you find yourself in the midst of a divorce, do remember that you can divorce a spouse, but not a joint financial commitment. That includes your mortgage.

You and your soon-to-be ex-spouse may agree on the property division and a court may assign ownership of the house to one of you, but if you have a mortgage that you both signed, you’re both still liable for the payments. As you might expect, the bank has no interest in your divorce, and no desire to simply let one of you “off the hook” for the payments. For them, the more people responsible, the better.

That means you’re financially tied together until the house is either sold or refinanced by the person in possession. If it took two incomes to qualify in the first place, keeping the house may not be an option.

More troubling to some is that if there’s no refinance, the payment history will appear on both of your credit reports.   If the person responsible for making payments falls behind, you’ll both suffer.

For many couples, selling is the best choice, but even that can be stressful. Unless your divorce decree involved one of you signing a deed to transfer full ownership to the other, you’ll have to reach some agreements.

First you’ll have to agree upon an agent, then you’ll have to agree upon the price. You’ll have to agree again when it’s time to respond to offers.

The agent you choose can be your key to success.

You need an agent who will be patient and sensitive to your needs, who will never divulge your motivation for selling, and who will never, ever take sides. You may also prefer an agent who is willing to meet with you separately.

Finally, you need an agent who will present you with a clear market analysis and show you your home’s true market value, so you need not have conflict over the listing price.

If the house you need to sell is in the Orlando area, I’d be pleased to offer you that kind of service.

Cathy Starkweather