Divorce Mortgages
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In a divorce, you and your spouse must divide marital assets and this includes any equity in your home. You must calculate the equity and figure out how it should be divided

You can think of selling your home, dividing the proceeds, and parting ways. This is the least completed option. However, if one of you decides to keep the house, you must find out another way to divide the equity.
The party that decides to keep the house must first know if they qualify financially in the lender's opinion to keep the house. Does it make good financial sense?
If you are the one leaving the house, you must determine the fair market value of the property and get the equity portion from your spouse. Ensure that the terms of equity distribution are included in the divorce agreement.

Yes, through divorce proceedings, a Quit Claim Deed can protect you by getting the property in your name exclusively. On the other hand, your spouse might sign a Quit Claim deed to relinquish all rights to the property. That means that he/she is no longer on the title of the property.  BUT may still be responsible for the mortgage.

However, you must be careful about ensuring that the Deed is properly drawn up and sealed as you should not be responsible for something that you do not own. Otherwise, any late payment by the holder of the property will impact your credit score too. Hence refinancing or selling the property and dividing the proceeds makes more sense.

It is important to know what you own during a divorce and how much you owe. Make copies of all important financial documents - wills, bank accounts, stock portfolios, retirement accounts, real estate owned, titles to vehicles, life insurance policies, and monies owed to you.

Also make copies of documents that reflect your marital lifestyle - checking statements, credit card statements, tax returns, and cash receipts. Get a restraining order from the courts if you think that your spouse will try to liquidate any of the accounts.

If you divide some of these liabilities, make sure you check the interest rates so that you do not get stuck paying the bills with higher rates.

Whenever you sell a house during a divorce, even if it is to divide the equity, you must consider the tax implications. This is because tax rebates are tilted heavily towards married people, more so if both are co-borrowers in a mortgage loan. When you are under divorce, you do not get the same rebates singly that you got jointly.

Hence, if you are considering divorce, settle property issues before the case goes to court.

If you sell the home after the divorce, there will be concerns about getting a fair market value from the house. Repairs may have to be made to achieve this, and both parties will probably have to contribute.

If you sell before you get divorced, you can set the price as you wish if it covers what is owed on the mortgage. You can also choose to reduce the price to account for needed repairs instead of making them yourselves.

Selling your home is often the smartest option when you are going through a divorce as it makes the division of the assets much simpler.

If you want to retain your house during and after divorce, make sure that you remain in it. If possible, try to get your spouse to move out. However, you must have the financial capability (and prove it to the lender) that you can make the mortgage payments. If not, you will not be awarded the house and will have to fall back on selling it and dividing the proceeds.

While the emotional trauma of a divorce cannot be denied, you must get financially secure for your future. Hence, you should focus on the following aspects to prepare for a life after divorce.

• Copy both your and your spouse's income tax returns and have a basic understanding of what is on them.
• Review current pay stubs with deductions, bonuses, and expense reimbursements
• Establish a credit history in your name
• Order a copy of your joint credit report
• Research and verify the ownership of all assets (e.g. stocks, bonds, annuities, bank accounts) and how they are registered.
• Know the mortgage terms on the family home, vacation, and rental properties
• Clarify the terms of pension and profit-sharing plans.

Discuss with your spouse the plans for the house, probably the largest single asset in the portfolio. Sell it and share the proceeds if none of you are sure that you can get the mortgage transferred in your name and be able to make the monthly payments.