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Do I have to keep paying the mortgage if I am separated?

 When a couple separates, often one will move out while the other continues to live in the marital home. The one that moves out may feel that it is unfair for them to continue to pay a mortgage for a home they no longer live in, however if their name is on the mortgage, they are still legally required to make payments. If both partners’ names are on the mortgage, it will hurt the credit of both if mortgage payments are not made in full – even if one of them pays “their half.”

The best course of action in cases like these is either to sell the home and divide the assets or to have a spousal buyout in which the person who remains in the home buys out the other and puts the mortgage in their name only.

Selling the family home.

If you and your ex decide to take this route, there are still some financial details to work out. Since it can take some time before the house actually sells, you will still have to make mortgage payments in the interim. Be as civil as you can with your ex and decide who will be making what payments. Don’t just do this verbally – get it in writing.

You should also decide how the money will be divided once the home is sold. It may not be a simple 50/50 split. For example, if only one of you is making the mortgage payments while the home is on the market, that person may wish to get reimbursed before the money is divided; or if one person lives in the home for a time after the separation, it may be fair for that person to receive a lesser amount. If you and your ex cannot come to an agreement, then division of assets will have to be decided by a judge.

Spousal buyout.

The other option for dealing with the martial home when there is a separation is a spousal buyout. In order to do this, the spouse remaining in the home will have to refinance the current mortgage and replace it with one that is in their name only. In some cases, this will not be possible if their credit is not good enough or if their income isn’t sufficient for them to hold the mortgage on their own.

If a spousal buyout is possible, the person who is being bought out will receive cash from the equity in the home while the person remaining in the home will have a new mortgage at a higher amount and possession of the house.

If you are recently separated and require assistance with a spousal buyout, contact Matrix Mortgage Global today!

 

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