Should I let my spouse keep the house?

A resident in Texas who is willing to let their spouse keep the marital home after getting divorced should require their partner to get new mortgages in their names only.

When couples in Texas get divorced, the number of decisions that they must make can feel overwhelming indeed. Part of this is due to the fact that many of these decisions end up requiring at least one party to give up something that they really would rather not lose. This might be part of a retirement savings account, a pet or a home.

In the case of a marital home, it is not uncommon for one spouse to want to keep the house. This may not be a bad decision but is one that requires careful attention, especially on the part of the person who will be letting go of the home.

Homes and mortgages are separate things

It might seem that if one person signs a quit claim deed signing over full ownership of a home to the other person, then it should be clear which person is responsible for making the mortgage payments. A divorce decree might also detail out which party has financial responsibility for the home.

However, as explained by Time, this strategy is not sufficient to eliminate the other person’s financial responsibility for the mortgage. A lender will look at the names on the loan, not the names on the deed, to determine who they can require payment from.

The risk of serious credit damage

According to The Mortgage Reports, if the couple did agree that one person would stay in the house and the existing joint mortgage would remain in effect, the person who leaves essentially opens themselves up to potential credit damage. If the spouse that keeps the home is late on any mortgage payment, both spouse’s credit reports will take the hit.

If the owning spouse misses multiple payments and the house even goes into foreclosure, the actions will be reports on both person’s credit reports. The only way to prevent this is for the person keeping the house to get a new mortgage in their name only.

Solo mortgages after a divorce

Getting a mortgage on one’s own immediately after a divorce may not be easy as divorce tends to reduce a person’s credit and income. Bankrate reports that the new tax law that takes effect January 1, 2019 may also play into the reduced income based on how alimony is assessed for tax purposes.

There are many factors that should be taken into consideration before a Texas resident agrees to let their ex keep the marital home after a divorce. This is one of the things that they should consult with an attorney before making any decisions about their home.