When you and your Colorado spouse make the decision to part ways, you need to figure out how to manage any assets and debts you may share. For many former couples, part of this process involves deciding what to do about the mortgage you have on your shared home.
Per Bankrate, one of the first things you may want to do when figuring out what to do with your mortgage amid divorce is have someone perform an appraisal. The appraisal should give you a good idea of your home’s current value, which in turn should help you determine a price if you decide to sell it. Then, you and your ex must examine your options and determine your next steps. Some of your options are as follows.
Sell the house and split the proceeds
Often, the simplest way to handle your mortgage is to sell the home, pay off the mortgage and then split any extra money you may make on the sale between you. That way, you get to make a clean break from one another. This option may also give you both money you need to find housing somewhere else.
Have one of you refinance the mortgage
If you want to keep the house and your ex does not, or vice-versa, the person who wants to keep the home should consider refinancing the mortgage to exclude the other party. The party who wants to stay may then be able to use his or her half of the equity in the home to pay off the other party.
Keep in mind that the decisions you make with regard to your mortgage may have tax implications. Determining what these implications are may help you avoid unpleasant surprises, come tax time.