After a Divorce, Who Pays for a Joint Mortgage Loan?

2 individual parties, wishing to share responsibility for mortgage debt payments, can enter into a joint mortgage loan. This type of legal agreement can assure each party that they share equally in the burden of the debt, but also in benefits, such as property equity and tax benefits. In a legal marriage, however, where the couple plans to divorce, these joint mortgage arrangements are not always simple to resolve.

Home Ownership

A home registered by a local authority, such as a county or city, is typically registered under a single name. The registering authority, in this case, will not usually view ownership of the home as being jointly owned, but owned by the person under whose name the property is registered. In divorces where this situation exists, the divorcing parties need to agree to a change of ownership, so that only one of the divorced parties legally owns the property. Then, sharing of equity may also be in dispute, and will need to be legally resolved.

Debt Ownership

With resolution of property ownership having been settled, the divorcing parties then need to determine how to share in responsibility for the owed debt. This can often be resolved by mutual agreement. If not, it will usually be decided by a court.