People in Arkansas who own a home with their spouse and make the choice to get a divorce know they must figure out what to do with their home after the divorce. In many situations, a couple makes the choice to sell their marital home. However, some situations do include one person staying in the home. When one person wants to do this, the other spouse should know how to protect themselves from any future financial damage.
MortgageLoan.com explains that a bank will consider both people responsible for the mortgage should both of their names remain on it. Even when a divorce decree outlines financial responsibility for a mortgage to only one spouse, the bank may still choose to pursue repayment from the other spouse. The bank may even report missed or late payments on both person’s credit reports.
The only way to avoid being financially liable for a former spouse’s mortgage payments is to require the person who will keep the spouse to get a new mortgage in their name only. SoFi notes that some mortgage programs or lenders allow one spouse to assume a previously joint mortgage so they should check with their bank to see if that is an option.
When one person keeps the marital home, the spouses may choose to sign a quit claim deed transferring legal ownership and rights to the person who will stay in the house. This makes that spouse the only person who can legally sell or refinance the home as well as profit from any future sale of the property.
