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Want to keep your home after divorce? Know about refinancing

The marital home is typically the single largest and most expensive asset people battle over during a divorce. This means that it is often at the root of the more significant financial and legal discussions.

Even if you agree that you will keep the house, there can still be issues that arise. For instance, you will likely want to refinance the mortgage. Doing this takes your ex's name off the mortgage, giving you complete financial responsibility for owning the home. Though if you plan to do this after a California divorce, there are some things you should understand.

You may not qualify

In order to refinance a mortgage, you must qualify for a new loan on your own or with a co-signer. Lenders could deny a refinancing application if:

  • You owe more money on the mortgage than the home is worth
  • You don't have a steady or high enough income
  • You have a low credit score or insufficient credit history
  • The loan amount is too high

The mortgage isn't the only home expense

Even if you do secure a loan, prepare for the fact that your mortgage is just one expense of owning a home on your own. You will also need to consider expenses related to taxes, utilities and maintenance, not to mention furnishing the home. Taking all these financial demands into account can help you budget for individual home ownership.

There are other steps to take to protect your home

Refinancing your mortgage means taking financial ownership of your home; your ex will no longer be on the line for any payments or penalties. However, as this article discusses, you will also want to have the titled transferred to you. This ensures your ex will have no claim to ownership over the property for which you are paying.

Retaining a marital home after divorce is not for everyone. However, if you do keep your home, understand that there will be some logistical, legal and financial obstacles to overcome to stake your claim properly. Should questions or disputes arise regarding the marital home during a divorce, legal counsel can help parties identify a fair, satisfactory resolution.

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