For divorcing couples in Texas, what to do with their family home can often be one of the hardest decisions they need to make. People generally attach a great deal of emotional energy to their homes and with good reason. The personal experiences connected to a home can involve raising children, celebrating special events together or with extended family and friends, and more. However, it is important to remember that a home is also a financial asset and must be addressed as so during a divorce.
When one spouse wants to keep the house after a divorce, the other spouse should understand the ramifications of allowing this and learn how to protect themselves in the process. As explained by SoFi, letting one person keep a family home may not be as simply as just moving out and moving on with one’s life. The person who leaves the house must find a new place to live.
Whether renting or buying a new home, a person must provide income and debt information. When the mortgage on a former marital home is included, their debt-to-income ratio suffers, potentially making it harder for them to qualify for a new loan or be approved to even to qualify to rent somewhere.
Money.com adds that the problems with allowing a joint mortgage to remain in place exposes them to financial risks they should avoid. The bank lender may report any missed or late payments on both spouses’ credit reports. Any foreclosure action may also include both people named on the mortgage loan documents. It is for these reasons that a refinanced loan in one person’s name would be preferable.