Divorce Laws on Mortgage Loans in Ohio

By Heather Frances J.D.

When you end your marriage in Ohio, you and your spouse have the option of reaching your own agreement about how to divide your marital property or you can have the court decide these issues for you. Either way, your divorce should decide which of you will keep the house -- but the court cannot order your lender to take your name off the loan.

When you end your marriage in Ohio, you and your spouse have the option of reaching your own agreement about how to divide your marital property or you can have the court decide these issues for you. Either way, your divorce should decide which of you will keep the house -- but the court cannot order your lender to take your name off the loan.

Separate Vs. Marital Property

In Ohio, the court generally has authority to equitably split marital property but not separate property. Marital property includes anything acquired during the course of the marriage by either spouse and separate property includes items acquired before or during the marriage by inheritance or gift. Your house can fall into either category, depending on when and how it was acquired. If both of your names are on the mortgage loan, you are both responsible for paying the mortgage. However, if the down payment for the purchase came from your separate property, the court might decide that you have more equity in the house than does your spouse.

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Property Awards

Generally, when couples purchase a mortgaged home during their marriage and the home has equity at the time of the divorce, an Ohio court allocates the equity between the spouses as part of an equitable property division. One spouse might buy out the other spouse, or the court might award you other marital assets to make up for your equity in the home if you are not keeping it. Before the court awards a mortgaged home to either of you, it may consider whether you can afford the mortgage payments, insurance payments and maintenance costs of the property, as well as your spending history if you will also be receiving spousal support.

Financial Misconduct

Even if you obtain a no-fault divorce in Ohio, if your spouse engaged in financial misconduct, Ohio law permits the court to compensate you with a larger share of marital assets. For example, the court could consider it financial misconduct if your spouse attempted to conceal assets during your divorce process or spent marital funds on an adulterous affair.

The Mortgage

If the court awards the mortgaged home to one of you, it can order the spouse receiving the home to remove your name from any debt obligations by paying off the mortgage or refinancing the home in his name only. If you receive the home, the court likely will order you to remove your ex-spouse’s liability for the loan, but if you cannot qualify for refinancing, you may be forced to sell the home to satisfy the debt.

Divorce is never easy, but we can help. Learn More
Can a Spouse Get Half of the House in a Divorce in Connecticut?

References

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How to Buy a House While Getting Divorced

A divorce divides a family into two separate households, which usually requires at least one spouse to find another residence. If you are considering buying a new home before your divorce is final, carefully evaluate all the potential complications that can arise from acquiring such a significant asset while the divorce case is pending. If you buy a new house before the divorce is final and without taking proper precautions, the court might deem it marital property and divide it accordingly.

Can a Divorce Decree Force a Refinance?

As a general rule, courts – even divorce courts – can't force someone to take on debt. But they can put you in a position in which you must do so to comply with another order. This might be the case if your divorce decree awards you the family home under the terms of an agreement reached with your spouse or because the court ordered it in a property division. You could find yourself in the position of having to refinance to buy your spouse's share of the property.

The Division of the House in a Divorce

When you're divorcing, the marital home can seem a lot like a pet elephant. You might love it, but it will cost a lot to keep it -- and your income alone might not be enough to swing it. Disposition of such a significant asset can be an important part of divorce negotiations; however, you have a few options, which are governed by the laws of your state.

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