If there is equity in the house (market value less debt), then the equity can be offset by other marital assets (e.g. exchange the house for investment funds). If you can qualify, you can see if the current lender will allow you to assume the loan if your current terms are favorable. Otherwise, again, if you can qualify, you may be able refinance the home.
Today, it is much more difficult to obtain a mortgage. You must be able to show sufficient income to make the payments and pay your other debt obligations and living expenses. You must have had this income stream (which can include your spousal support payments) for at least 3-6 months.
If you cannot qualify to finance the home yourself, your spouse may be willing to remain on the mortgage for a period of time (until it is sold or refinanced). Your spouse may make all the payment, part of it, or none of it, depending on your agreement. Spousal support from your spouse to you may make it possible for you to make the payments directly to the lender. If you enter into this arrangement, you need to be aware that your ex-spouse staying on the mortgage may affect their ability to obtain a mortgage on another property (FHA provides an exception to this “rule”). You are also still living in a property that is partly owned by your ex-spouse, so you need to consider how much this “benefit” is worth as part of your agreement (ie should you be paying some rent?). Also, you may need to take into account who has been paying the mortgage when you divide the proceeds from the sale.
If you have to sell the house, then you may agree that one of you gets to keep the proceeds or that you will share them upon sale. Your agreement should be very clear about such things as how decisions will be made, what happens if the house does not sell in a certain period of time, who will pay for the mortgage, taxes, insurance and upkeep until the house is sold, etc.
If your owe more than the house is worth, and you are in financial stress, then you may be eligible for government assistance to have the house refinanced on terms that allow you to stay in it, or be allowed a short sale (selling the house for less than you owe) or a Deed in Lieu (swap your loan for the house and walk away) with the lender swallowing the shortfall. These options are often better and quicker than foreclosure and if the lender is sensible, can be a win-win for both you and the lender. For more information on the Government’s MHA (Making Homes Affordable) program, click here and also go to our Links page.