What Is An “Assumable Mortgage” In Divorce? | Orlando Divorce Lawyers Orlando Divorce Lawyer
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What Is an “Assumable Mortgage” in Divorce?


One of—if not the biggest—asset decision couples make during divorce is whether or not to keep the family home. We have discussed the issue before—particularly when it comes to ensuring that you can not only afford to do so, but that you want to take on that financial responsibility, and whether or not, in some circumstances, it might turn out to be a big real estate mistake.

Below, we take a closer look at the option of assuming the original mortgage, as this tends to be the most appealing option to individuals who are interested in holding onto the family home after divorce.

Your Mortgage Options If You Want to Keep the Family Home

In general, if you end up staying in the home, your options are to:

  • Assume the original mortgage: this is typically done when you have a good rate and payment terms on your existing mortgage and it allows for a loan assumption;
  • Refinance the joint mortgage: so that the mortgage is refinanced in your name only; or
  • Retain the original joint mortgage: whereby both spouses remain liable on the mortgage even though only one keeps the home. This generally only works if there is a significant amount of trust between you and your ex, as a payment default will have financial repercussions for the both of you, regardless.

Common Misconceptions About Assuming the Mortgage

The option that typically draws the most questions when it comes to an individual figuring out if they want to keep the family home is how to go about assuming a loan. What this involves is basically one borrower being removed from the loan without the remaining borrower having to refinance it. This is typically attractive to some because it not only allows you to separate yourself from the joint mortgage, but you get to protect your current, favorable terms on your loan instead of refinancing it (which often comes with a higher interest rate).

However, it is important to remember that not all loans are assumable. In fact, most of those issued after 2008 are not. You should never assume this without taking a close look at your promissory note with the assistance of your divorce attorney. In addition, the process is not as simple and easy as it may seem; in fact, the process is similar to refinancing a loan, whereby the lender requires full documentation of assets, income, etc. in order to ensure that you can afford the payments without the assistance of your spouse.

Contact Our Florida Divorce Attorneys to Find Out More

The decision over whether—and how—to keep the family home is one you want to make with the assistance of an experienced divorce attorney. Contact our experienced Orlando divorce attorneys at Arwani Law Firm, PLLC today to find out about our services and how we can help.




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