How is a Mortgage Handled in an Illinois Divorce?

property management

Dividing up property in a divorce is never easy, but deciding what to do with a family home and its mortgage might be one of the toughest decisions you have to make. Not only do you still owe money on it, but the property itself probably has quite a bit of sentimental value. There are ways to fairly deal with this issue though, and a Tazewell County property settlements lawyer from our firm may be able to help you.

Can One Person Keep the House and Mortgage?

It is possible for one spouse to keep the home and the mortgage. In order to do this, the mortgage would have to be refinanced in one person’s name. The lender would have to accept you or your spouse as the sole guarantor and the property would need to be retitled.

This may not work in some situations though. The spouse who wants to keep the house needs to be approved as a sole owner, and that could be difficult depending on their credit history and other factors. If the spouse who wants to take the home has bad credit or few assets, the lender may not want to accept them as the sole guarantor of the loan.

What Are Other Options For Handling the Mortgage?

One of the easiest ways to deal with a home is to just sell it and keep the proceeds. This can be split up during the property distribution process. The money can be split half and half, or one spouse could get more depending on how other property has been distributed.

One spouse could also buy out the other one by purchasing their equity. If you owe $300,000 on a $500,000 home, you have $200,000 in equity. The spouse interested in keeping the home would have to pay them $100,000 for their share of the equity if a couple has been paying their mortgage off together.

What Else Should Be Considered Before Making a Decision?

Before you decide what to do with the house, you should also consider the feelings of your children, if you have any. Would moving be too stressful for them? Would you have to move out of the area if you sell the house, moving them away from their school and friends? If a move would cause issues for your family, keeping the home might need to be prioritized.

If one spouse wants to take on the mortgage themselves, they also need to be sure that they can afford to pay the bills on their own. Alimony and child support may be able to help, but keeping the mortgage may not be worthwhile if it overextends someone financially.

Schedule a Consultation With a Family Lawyer

If you want to make sure that your property gets divided up in a fair way, contact Butler, Giraudo & Meister, P.C. We can protect your interests during the divorce process and answer any questions that you have during the property distribution process.

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