What Happens to the Mortgage When You're Divorcing?

Divorce is hard — especially when your home is involved.

Whether you're thinking about staying, selling, or buying out your spouse’s share, what happens with the mortgage is a big decision. And it’s not always as straightforward as people expect.

This guide breaks down the mortgage side of divorce in plain terms — so you can protect your finances and plan for what’s next.

What Is Divorce Mortgage Planning?

Think of divorce mortgage planning as the bridge between your divorce settlement and your real-life finances. It’s about making sure you can actually carry out what’s in the agreement — especially when it comes to keeping or refinancing the home.

This goes beyond just the math. It’s making sure:

• The way you hold title won’t cause issues.

• Your income and debt are structured to support a loan.

• You’re not stuck with vague language that hurts your options down the road.

The 4 Phases of Divorce Mortgage Planning

1. Vetting the House

Before you make any decisions about the home, you’ll want to:

• Get an appraisal or CMA (depending on whether you’re keeping or selling)

• Understand the title (joint tenants, tenancy by the entirety, etc.)

• Gather your mortgage info — including statements, tax bills, insurance, and anything tied to the property (like solar panels or HELOCs)

🔍 Heads up: Divorce appraisals can’t be reused for refinancing. A lender will need their own.

2. Qualifying Income

Here’s where it can get tricky — especially with support income or part-time work.

Lenders need income to meet two standards: stable and consistent.

• Employment gaps (like returning to work after caregiving) need explanation.

• Support income must follow the 6/36 rule — 6 months of consistent payments, and proof it will continue for 36 more.

• Lump-sum payments don’t count as income, even if they help your bank balance.

And be careful: putting support into a joint account or offsetting it with bill payments may disqualify it from mortgage calculations.

3. Managing Consumer Debt

Debt impacts your ability to qualify — sometimes more than people realize.

Here’s what to watch for:

• Clearly assign debt in your settlement. If not, you could be counted as 100% responsible, even if you’re splitting it.

• Avoid closing joint accounts too soon. This can drop your credit score.

• Use proper “assignment of debt” language. This helps if your name stays on a mortgage you’re no longer paying.

Your CDLP® (Certified Divorce Lending Professional) can help with the right language and strategy here.

4. Exploring Home Equity Solutions

You typically have three options:

✅ Leave the current mortgage in place

If you're not ready to refinance, keeping the existing loan (especially if the rate is low) might make sense. Just remember: both parties remain legally responsible.

🔁 Refinance with an equity buyout

If one spouse is keeping the house, this is the most common option. To qualify:

• That spouse must be on the title for at least 12 months.

• The new loan must be structured correctly — this isn’t the time to wing it.

• No debt payoffs in the refinance, or it becomes a cash-out loan.

🏠 Sell and purchase new homes

Selling can be the cleanest option when neither spouse wants or can afford the home. You’ll want a plan for down payments, qualifying timelines, and how mortgage liability is handled post-sale.

What About Assuming the Mortgage?

Sometimes one spouse wants to “assume” the loan instead of refinancing. This is possible in some cases — but comes with strings.

• Legal assumption: The spouse takes over payments, but the other is still legally on the hook.

• Qualified assumption: Fully transfers liability — if the lender allows it, and the new borrower qualifies.

🚫 Assumption doesn’t give access to equity. If a buyout is part of the plan, refinancing is usually required.

Why Equity Buyout Pre-Approval Is a Must

Before finalizing your settlement, get pre-approved for an equity buyout if you're planning to keep the home.

Why it matters:

• Many divorce agreements require refinancing within a set time.

• If you can’t qualify, you may be forced to sell — even if you wanted to stay.

• Pre-approval gives you (and your ex, and your attorney) peace of mind that your plan will actually work.

Watch Out for These Common Pitfalls

A few things that can derail your mortgage plans post-divorce:

• Vague or incorrect settlement language

• Changing title before securing financing

• Closing accounts too early or missing support payments

• Overlooking the impact of credit, escrow balances, or second mortgages

This is why it’s so important to loop in a mortgage expert before finalizing anything.

Final Thoughts

Divorce is already an emotional rollercoaster. Mortgage planning shouldn’t add more stress — it should provide clarity and confidence.

The earlier you start planning around the house and financing, the more options you’ll have.

Let’s Plan the Next Chapter

If you’re navigating divorce and not sure what to do with the home — or you just want to make sure you’re on solid footing—I’m here to help.

I work alongside CDLPs, attorneys, and financial planners to make sure you’re supported every step of the way.

📩 Let’s talk through your options — I'm here to help.

Megan