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How can I be sure that I can keep my home after divorce?

Retaining ownership of a martial home is not an uncommon desire for at least one party during a divorce. If the other individual has no desire to remain in the home after a divorce, it may appear as though the case is clear-cut. Unfortunately, some New York couples might be surprised to discover that achieving a simple agreement on who stays and who goes may actually be much more complicated.

Many notes and mortgages for marital homes have both spouses listed on the documents. If the couple decides to divorce and don't want to sell the home, they may decide that refinancing the mortgage in the name of the person who wants to keep it is the best course of action. It may seem straightforward enough, but in many situations, it's rarely as easy as that. 

What some couples fail to consider is that a loan that they qualified for jointly may not be available to just one of them. Perhaps the spouse hoping to stay in the home won't have the required income. Even if he or she has an adequate income, a low credit score or even a reduced net worth may still disqualify them from refinancing. For instance, both income and net worth are exceptionally important for mortgages higher than $417,000.

In some instances, one spouse might even agree to remain on the mortgage so that his or her ex can remain in the home. This may be less likely to occur as that individual would still be on the hook for any missed payments. As a number of factors can influence whether a home can be kept after a divorce in New York, requesting that preapproval for refinancing be completed before the divorce settlement is signed off on can help both parties understand what will ultimately happen to the house. If the individual wanting to keep the house can't refinance and his or her ex won't remain on the mortgage, ultimately their best option may be to sell the house.

Source: The Wall Street Journal, "In a Divorce, How One Spouse Can Keep the House", Anya Martin, Nov. 5, 2014

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