You may have the option to keep your house when getting divorced. For instance, your ex may be willing to take other assets – a savings account, investments, other types of real estate, etc – in exchange for their 50% ownership of the house. Instead of selling it during the divorce to divide the money, you get to keep the home.
Even if your ex agrees to this, you may still need to refinance. If you and your spouse originally applied for the mortgage loan together, you are both on the paperwork. Refinancing removes your spouse and puts the home into your name. This needs to be done even if your spouse already agreed to “give” you the house in the property division. Legally, it is still jointly owned until you refinance into your name.
Why is this necessary?
Doing this is important because it helps to define who has to make those future mortgage payments. Even if you are divorced, if you’re both on the mortgage, you are both responsible for making those payments. The divorce decree itself does not absolve either party of this responsibility.
For instance, you may start by paying the mortgage every month, but you could run into financial troubles five years from now. If you stopped paying the mortgage and your ex was still on the loan, the lender would contact your ex and demand payment. But if you refinance, your ex is officially cut out of the situation and has no responsibility to cover your payments in the future.
This is just one part of property division, but you can see how complex things may become. Carefully consider all of your legal options.