If you plan to keep your current residence, it may require some planning. You may have an option to negotiate a fair arrangement with your soon-to-be ex-spouse when taking custody of your children.
As reported by Money.com, holding on to your property requires a careful review of your budget and your ability to afford a home’s upkeep. A single-household income must generally cover a mortgage, utilities and homeowner’s insurance.
How may divorce affect an existing mortgage?
If your home has a mortgage, you may need to refinance it. Your loan application may include personal income and court-ordered child or spousal support. Refinancing typically leaves an ex-spouse’s name off the loan.
When you cannot show proof of sufficient income and favorable credit history, banks may not approve a new mortgage. Applications, however, may include a co-signer. This may allow you and your children to remain in your current residence.
When may I need to buy a home from my ex-spouse?
Divorce may require dividing a home’s equity fairly between both spouses. When your property holds cash value, you may use some of it to buy out your ex-spouse’s fair share. Some couples may decide to use a home’s equity as a “trade” to obtain ownership of other shared marital assets.
If, for example, your spouse’s fair share of equity equals the value of your shared vehicle, he or she may prefer to take the car. Trading assets may work as a negotiation strategy and enable you to take sole ownership of a residence.
New Jersey’s laws require divorcing couples to divide their marital assets fairly. They may also serve as bargaining tools to take ownership of a home, which may also require a new mortgage. The court may honor your request for financial support from your ex-spouse if you need the income to qualify for a home loan.