Your spouse asks for just one thing in the divorce: the family home.

They say they won’t sell. They won’t negotiate. They simply do not want to lose the house. You don’t have children or pets. The home is the one asset they really care about that the two of you have bought together.

Now what? Can you just agree to it — maybe asking for the retirement funds or business assets in exchange — and move on with your life? Can you trust that your ex will keep making the payments on the home that you bought together?

A significant risk

No, you should not operate on a simple trust-based agreement. Your name is on that loan. Keeping it that way after the divorce is a huge risk. It is typically better to have your spouse get a new mortgage and refinance the house.

The problem is that divorce itself does not absolve you from that debt. You took out the loan. You agreed to pay it back. The lender still holds you in a binding contract. They do not care that you decided to end your marriage or that your spouse assured you that they’d never miss a payment.

If your ex does miss payments, that’s when the calls start coming in. The lender will want the money from you, regardless of the divorce agreement. If the house goes into foreclosure, your credit score takes a hit. The financial ramifications are just as real as if you’d stayed married.

What if you can trust your ex?

You may argue that this won’t happen to you because you can trust your ex. A lot of people do. After all, you wouldn’t be considering this if you didn’t.

If so, there’s another problem to think about: getting a future loan. That mortgage still shows up on your record. Can you get a second mortgage to buy a house or apartment? Can you get business loans? Can you even get approval to rent a place to live?

Again, lenders may not care that your ex agreed to pay. They know you still have an obligation to do so in a pinch. They may not lend you any money as long as that’s true.

Refinancing

No matter what, refinancing removes the risk and allows you to really move forward with your life. Your ex just has to buy the house on their own. Then you can weigh this against other assets, split them up and start this new chapter.

As you can see, the decisions you make during divorce drastically impact your future. Make sure you are well aware of exactly what you need to do and how to protect yourself.