Divorcing Nevada residents may wonder how jointly owning a home can affect the process. A buyout may be relatively simple if the ex-spouses agree on the home's value and there is no mortgage. However, a mortgage loan can complicate things, especially if the spouse who keeps the home is not able to refinance the joint loan into an individual account.
A divorce does not sever the relationship between the borrower and the bank. Each person listed on the loan can be legally responsible for making sure that the balance is paid in full. If the ex-spouse who retains possession fails to make payments, it will negatively reflect on the other ex-spouse's credit. In addition, the ex-spouse that moves out may not be able to get another loan with a high debt-to-income ratio and a mortgage payment showing on the credit report. Therefore, many couples choose to sell the house to a third party or to have one spouse refinance the mortgage if possible. When negotiating a buyout, it is important for the ex-spouses to consider which ex-spouse provided the down payment in addition to the equity.
Another issue to consider is what happens if one person seeks to buy a new property before the divorce is complete. It may be necessary to obtain documentation from the other person disclaiming any ownership interest in the new property.
A family law attorney may be able to help people going through a divorce determine which person should remain in the home. This help could include looking at the amount of equity in the property, the credit rating and income of each person or each person's ability to make mortgage payments. An attorney may also be possible to assist in obtaining appraisals or drafting documents to transfer ownership.