A couple in North Carolina who is getting a divorce may need to divide their house. In many cases, this will require refinancing. Refinancing is usually necessary to remove one person from the mortgage. Otherwise, that spouse could remain responsible for the home regardless of what is agreed in the divorce, and this can be harmful to that person’s credit.
Many people may not have the funds to buy out a spouse, but there are other ways to do it. For example, the spouse who is not keeping the home might take other assets of equal value such as a retirement account. An ex who is owed spousal support might waive the payments in order to keep the home. However, it’s often a good idea to work with a financial adviser to see if these kind of arrangements are workable. A cash-out refinance is another option.
This type of refinancing can also provide funds for other needs such as setting up an emergency account, home improvements or paying off high-interest debts. This can also be an opportunity to change to a fixed-rate mortgage in which interest rates do not fluctuate. Refinancing might also lead to lower interest rates overall.
Keeping the home can often be a decision driven by emotion. Therefore, spouses should make sure that they can afford it. Besides the mortgage, costs such as insurance, taxes, maintenance and utilities should be taken into account. Other factors may also influence a person’s decision to keep a home. For example, a custodial parent might want to stay in the home because it will be less disruptive for the children. However, a couple could also decide to sell the home and move into smaller places. A lawyer can help a divorcee through the process of dividing property such as the family home.