Divorcing - What Happens When You Cannot Afford Your Mortgage on Your Own?

Updated on January 26, 2011
A.D. asks from New York, NY
14 answers

Has anyone been in a situation of divorce where none of you can afford the mortgage on your own? Did you just both move out and ruin your credit (stop paying the mortgage) or did the mortgage company somehow "work" with you? The house is currently valued at 70k less than what we bought it at! (we bought right before things started going bad) No doubt it would be a short sale if anything...

I have not called the mortgage companies yet (we have two mortgages). I was just wondering if anyone had gone through a similar situation and how you resolved it.

added: It really wouldn't make sense for either of us to stay in the house - it is just too big for me and my son and the same would go for my husband.

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answers from Houston on

I opted to move out and let him keep the house! I knew I couldn't afford it and I wanted something new with fresh and positive memories!

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answers from Pittsburgh on

Normally the house is sold and any equity is split between the two parties.

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answers from Redding on

Oh boy. Can you rent out the house for enough to cover the payments?
Can you and the kids live there, splitting the mortgage payment with the agreement that you will sell it when the market changes in a few years?
I know people that have done that.
My ex was ordered to pay me child and spousal support and let me and the kids live in the house until it could be sold. He was allowed to deduct my half of the mortgage payment from the support amount.
The only problem? He didn't pay the support AND he didn't pay the mortgage either.
He said he would never allow me to live in that house without him there as my husband.
He forced it into foreclosure. To prove a point, I guess.
You want to know what makes me sick?
The house sold for $500,000 dollars more than we paid for it 7 years later.
The kids and I could have stayed there, in one place, for 7 years and we could have split half a million dollars.
My ex husband was an idiot. All he cared about was punishing me for leaving him and making things hard on me.
I would call someone reputable in your area and get some advice. You might need to come up with something creative to either cut your losses or hang on until you can share some proceeds with your ex down the road.
I hope you find a way that benefits you both.

Best wishes.

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answers from Provo on

You guys could just sell the house. If you decide you want to keep the house then I would talk to the mortgage company because there are different programs that you could get into.

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answers from New York on

Most peope do not stop paying their mortgage. The fate of the house is determined in your financial settlement. If one person can continue to pay the mortgage once the spousal support and child support are determined, then that person can stay in the house, and buy the other out of their interest in the house. If this cannot be done, usually the house is sold and there is a provision in the financial aspect of the divorce settlement as to how the profits are split - or the debt.

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answers from Seattle on

Working through the numbers I'd get the house, but even with alimony & CS, wouldn't be able to make half the mortgage.

HOWEVER, I could fix it up a tad and lease it. Not for the full ticket of the mortgage (or more, which, of course would be ideal), but I could easily afford the leftover amount + rent on an apartment for my son and I. I would prefer to lease rather than to sell for the simple fact that I couldn't buy another house for YEARS without my husband's salary. Keeping the house, however, I could wait out both the market and sell it for a profit or wait out my paycheck to where I could afford the mortgage on my own.

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answers from New York on

You have a few options:

1. Sell the house

2. Rent the house out for market value and use that money to pay the mortgage amoung other household bills and repairs. (Upon divorce - One party buys the other out of their share of the house and takes over the full responsibility of the house.)

3. Move and let the house slip into foreclosure.

4. Continue to live there together and split the bills then sell the house as part of the divorce settlement.

5. Let the house fall into foreclosure but save the mortgage money monthly so you will have a decent nest egg to build a future on. Foreclosure is bad but not the end of the world. There are many people at this time who are learning valuable lessons and in a much better position financially to afford another house in the nearer future rather than the full 7 years it takes for that to be removed from your records. Be certain to pay your other bills on time every time.

I would pick the one that would give me the biggest piece of mind.

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answers from Los Angeles on

I haven't personally gone through it (the house was in MY name, so it was a no brainer). Others I have known just put it up for sale. There's no reason to have to ruin your credit, selling it is an option. Although you have to look how much is it worth, how much it would cost you, etc. I did know one couple who stayed in the house until sold, but all others did not.
The guy we bought our house from had all of his mortgage payments stopped when he started his short sale. I am not sure of the details as to why, I do know he was responsible for any city fines, and the taxes on the house, but his mortgage was stopped.
You just have to start your homework. Good luck.

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answers from Lansing on

I know when one set of my parents divorced, they ended up putting the house up for sale.

Edited: No, my dad moved out, and she stayed while they were selling it. But it was set up in the divorce decree (however it's spelled) that they were both financially responsible to pay the mortgage til it sold. Basically, my dad paid half the mortgage for her to live there til it was sold. But she was responsible for all the other bills (utilties). It took only a couple of months to sell it, but the market was better then.

If need be, look into doing a short sale on your home. It might make your credit score go down, but it might be your best bet in the long run. Just make sure you have another place to live before you do it. Or, if you guys don't want any fiancial gain, sell it for what you have left on the mortgage.

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answers from Biloxi on


Look into a permanent mortgage reduction. This is where you show a reduction in income and the mortgage company restructures your loan into a permanent fixed lower interest rate thereby reducing the monthly payment to a manageable level. Doesn't matter if your income doubles later - the mortgage is fixed.

Sometimes the mortgage company will work with you on this. If not look into NACA - they have a Home Save program that will negotiate with the mortgage company for you. Since they are a national non-profit association this costs you nothing - except a ton of paperwork. :)

In the current housing market mortgage companies really don't want the houses back - they take huge losses. Also, several of the large mortgage companies currently are banned from processing foreclosures due to unethical practices in the past 24 months. All of this is an advantage to you in having the mortgage company work with you to make the mortgage more manageable.

Do not take the mortgage company's offer of short sale, or "giving" back the house unless you have no other options. This only benefits the mortgage company.

Unfortunately, your mortgage, like mine, and many others, is upside down and selling the house will leave you and your Ex still having to come up with the difference. With the current economy if there is any way you can hold on to the house for another 3 years or so, the market should be better and then you could sell.

Renting the house out is another option - just remember that you have to have at least 2 - 3 months of money stashed to cover any gap between tenants and any money stashed for any repairs that may be needed during the rental period. But, it is a viable option.

Just be sure to educate yourself and explore all options before you make any decisions. Good Luck!!!

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answers from Los Angeles on

Could you re-verse mortgage it, sell it or rent it out? Rentals are hot right now, you can be super picky with the renters you choose, background checks, credit checks, strict lease, you can do month to month 6 month year 2 year etc.. & you can legally come check on the house every month or so. It's scary renting your house out but everyone I know doing it has had great success with it so far & no problems. I would call your mortgage companys asap & ask them what your options are!

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answers from Oklahoma City on

I would think selling the house and splitting the money, if any, would be the fair thing to do but a court mediator may be able to help you guys work out a legelly binding agreement to split the payments until the house can be sold. You really don't want him trying to manage your budget or butting in on what you do or don't do to the house. If you really want to keep it them redoing the mortgage is the only option I know of.

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answers from Jamestown on

Rent it out and split the earnings.



answers from Binghamton on

Why not look into taking in a couple of roommates? There are lots of people looking for cheaper rents by splitting expenses. That way you could split expenses with the morgage, utilities etc. Maybe even find an elderly person who could help with childcare also.

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