Baltimore & Towson Lawyer Discusses Divorce & The Mortgage.
The Home, Marital Property, and Marital Debt
If you and/or your spouse acquired real property (whether it is in your name or not) during your marriage (including during separation) then it is probably Marital Property. If there is a mortgage, then the mortgage is probably a marital debt because it is connected to the acquisition of marital property (whether you are on the mortgage or not).
What Can The court Do To The Marital Home?
- The Court will usually order a sale in lieu of partition. The Court will order the home sold (typically through auction; typically using a court appointed trustee). The parties generally divide the net proceeds, or whatever is left after the mortgage, taxes and commissions are paid.
- The Court may postpone disposing the house for up to three years if the home is family use personal property. Typically, this is when the court finds it is in the best interests of the children to continue residing in the marital home.
Spousal Buy Out
A possible option for divorcing couples who are not in agreement about how the home and mortgage should be handled is for one spouse to buy out the other spouse’s interest in the house and keep the home for him or herself. It is important to keep in mind, however, that unless the spouse keeping the home refinances it in his or her own name, both spouses will remain legally liable for the mortgage until it has been paid off -- regardless of whether you are enjoying and using the home or not.
Sell the Home If It’s Not Possible to Refinance
Couples who are able to negotiate certain aspects of the divorce may find it easier to reach an agreement whereby the spouse who intends to keep the home gets a certain length of time to attempt to refinance the home loan; however, if he or she is unable to refinance within the selected time frame, both parties will agree to sell the home and split the proceeds.
Choosing this option will give the spouse who is keeping the home a chance to pay down debt, increase his or her savings and/or increase his or her income in an effort to meet the qualifications for a home refinance.
For many divorcing couples, selling the home may not be a viable option, particularly since so many homeowners are faced with the problem of owing more on the mortgage than the home is actually worth. Still, there are alternate options available in such situations.
For instance, you might consider renting out the home for a certain amount of time, which will serve to delay the actual sale of the home until a sufficient amount of equity has accumulated. Another option is to do what’s known as a “short sale.”
A short sale involves the lender agreeing to take a lower amount of money for the home, and once that amount has been paid, the original debt will be cancelled. You should be aware, however, that short sales can harm your credit and they may come with a variety of tax implications.
Some parting couples may find the whole home/mortgage issue to be quite complicated, and as our Towson divorce lawyer knows, anything having to do with money can lead to major arguments and frustrations between divorcing individuals.
Call (410) 321-4994 For a Free Consultation
Call The Law Offices of Amar S. Weisman at (410) 321-4994 to schedule a Free Consultation. The Purpose of the consultation is to determine whether you want to retain this law firm as your Baltimore County & Harford County Family Lawyer. If you do wish to proceed, then you must pay a retainer. See Our Policy on Fees and Costs. The family firm is located next to The Circuit Court for Baltimore County, at 1018 Dulaney Valley Road, Towson, MD 21204.
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