What to Do With a House in a Divorce

Deciding what to do with a house during a divorce is one of the biggest financial choices you’ll make. The home is often the most valuable asset, but it can also be a major source of financial stress. Many people assume they have only two choices—sell the home or refinance it into one spouse’s name—but that’s not always the best move.

Keeping the home without refinancing can be a smart financial decision, saving tens of thousands in interest and unnecessary costs. The key is understanding whether divorce mortgage assumption or another option fits your situation. The best way to know for sure is by working with a professional, like the Divorce CFO, who can provide a Mortgage Feasibility Report and show you exactly how to save the most money in your divorce.

Here’s what to consider when deciding what to do with your house:

• Selling the home isn’t always necessary, even if both names are on the mortgage.
• Refinancing can be a costly mistake when better options exist.
• A professional, like the Divorce CFO, can help you keep your home and your low rate, saving you thousands in the long run.

Should You Sell the House in a Divorce?

Selling the home is often the first solution couples consider, but it’s not always the best one. While selling may provide a clean financial break, it can also result in unnecessary costs, such as realtor fees, moving expenses, and capital gains taxes. If the home has a low mortgage rate, replacing it with a new loan at today’s higher rates could mean significantly higher housing costs for both spouses.

Before deciding to sell, consider whether one spouse can stay in the home under the existing mortgage terms. If the loan allows for a divorce mortgage assumption or modification, keeping the house may be the more financially responsible move.

Is Refinancing the Best Option?

Many assume that refinancing is required if one spouse keeps the home, but refinancing often leads to higher payments, additional loan fees, and a worse financial position. If your current mortgage has a low interest rate, refinancing into a new loan at today’s higher rates could cost you hundreds more per month and tens of thousands over the life of the loan.

Beyond the higher rate, refinancing comes with closing costs and stricter income requirements. Many divorcing homeowners later realize they didn’t need to refinance at all. Before going down that road, it’s worth exploring whether a Mortgage Feasibility Report could show a better alternative.

How Does Divorce Mortgage Assumption Work?

A divorce mortgage assumption allows one spouse to take over the existing loan while keeping the same terms, including the interest rate and monthly payment. This can be a major advantage in today’s market, where new mortgage rates are significantly higher.

Not all loans qualify for an assumption, but many government-backed and conventional loans allow for this process. The lender may require financial verification, but in many cases, this is still far easier and cheaper than refinancing.

Because lenders don’t always advertise assumptions as an option, working with the Divorce CFO ensures you know exactly what’s possible before making a costly decision.

What If You Can’t Assume the Loan?

Even if a mortgage assumption isn’t possible, there are still ways to keep the house without refinancing into a higher rate. Some lenders offer modifications that remove a spouse’s name while keeping the existing loan intact. In other cases, creative financial agreements between spouses can ensure one person keeps the home without triggering unnecessary costs.

Options may include:

• Loan novation: A lender-approved transfer of mortgage responsibility.
• Structured buyouts: Creating financial terms that allow one spouse to remain in the home while fairly compensating the other.

These strategies require planning, but they often result in better financial outcomes than selling or refinancing. The key is making the right choice from the start.

How to Keep Your Home Without Losing Money

The worst mistake divorcing homeowners make is assuming they have to give up their low mortgage rate. Keeping the home under the right terms can lead to substantial savings. For example, if your current mortgage is at 3% interest and refinancing would push it to 7%, you’re looking at hundreds of extra dollars per month—money that adds up quickly over the years.

This is why it’s essential to explore all available options. By working with the Divorce CFO, you’ll get a Mortgage Feasibility Report that lays out the smartest path forward, ensuring you make the best decision for your future.

Get a Mortgage Feasibility Report Before Making a Costly Decision

Choosing what to do with your house in a divorce isn’t just about what feels fair—it’s about what makes the most financial sense. Selling or refinancing could cost you tens of thousands of dollars unnecessarily when better solutions exist.

The Mortgage Feasibility Report shows you exactly what’s possible, whether that means assuming the loan, modifying the mortgage, or another strategy that helps you keep your home and your financial stability. Before making a decision you can’t undo, schedule a consultation today.