Generally, when couples get divorced, they have three basic options that they will consider for what to do with their home. In some cases, one person wants to keep owning the home, so they’ll just buy out the other person’s share. They may need to refinance their mortgage at the same time. But, in most cases, the couple just sells the home because they can then split up the earnings.
However, the third situation is where the couple gets divorced but continues to own the home jointly. This is less common and sometimes comes as a surprise to couples who think they don’t have any choice but to split their assets up. But you certainly can retain ownership and continue paying a mortgage together, even when you’re not married. What are some reasons people want to do this?
They owe too much on the house
In some cases, the house is too expensive and they may owe more than it’s worth. However, they think that the market will increase in the future. Rather than selling at a loss, they will retain ownership until they can at least break even or perhaps even earn money in the sale.
One person can’t get a new mortgage
Another issue that sometimes arises is that the person who is going to keep living in the house can’t afford the mortgage payments, but they would not be approved for a new mortgage by a lender. They may also not want to get a new mortgage because interest rates are higher. It is a better financial decision for them to own the home together, even though one person is only paying every month. However, this is a risk to the other spouse, who would still technically be responsible for the mortgage.
Children still live at home
In a lot of cases, couples just have children who live at home and perhaps don’t want to move. Maybe the children are late in their high school careers. They’ll soon be going to college anyway, so the couple will spend a few years owning the house together, even though they’re no longer married, and they will then sell it after the children have moved out.
Dividing assets like this can get complicated. Take the time to look at all of your legal options.