Delaware residents who own a home with their spouse and get divorced must figure out what they will do with their house. In many situations, a couple ends up making the decision to sell a family home as part of their divorce process. The proceeds from the sale may help them pay off other joint debt so each person can move forward with no financial ties to each other. However, in some situations, one person wants to keep the house and remain living in it.
As explained by The Mortgage Reports, keeping a home after a divorce requires people to take a few steps to protect themselves and their financial futures. For the person who agrees to leave the home, it is important that they ensure their name is removed from the mortgage. If this does not happen, the bank may still consider them financially liable for the debt. Their credit report could reflect any missed or late payments even if the divorce decree stipulates the debt was the responsibility of their former spouse.
Some loan programs allow one person’s name to be removed from a mortgage, leaving the initial loan intact. If this cannot be done, the person who wants to stay in the house should obtain a new mortgage in their name only. Loan approval can be tricky on a post-divorce income and may require a co-signer like a parent or sibling.
Bankrate adds that the person who keeps the home should require their former spouse to sign a quit claim deed transferring ownership to the person who will also have the financial responsibility for the property.