Divorce and Your Mortgage in California: What Happens to the House?
"Divorce is hard enough without worrying about losing your home too. You're dealing with emotional upheaval AND financial uncertainty. Take a breath. There are solutions, and you don't have to figure this out alone."
When you're going through a divorce in California, one of the biggest questions is: what happens to the house? The mortgage doesn't care about your divorce decree - if your name is on the loan, you're responsible. This guide explains your options and how to protect yourself.
The Hard Truth About Divorce and Mortgages
Here's what many divorcing couples don't realize until it's too late:
Your Divorce Decree Doesn't Change Your Mortgage
Even if your divorce agreement says your ex is responsible for the mortgage, you're still legally liable to the lender if your name is on the loan. If your ex stops paying, the lender will come after you - and your credit will suffer.
The only ways to truly separate yourself from the mortgage are:
- Refinancing into one spouse's name only
- Selling the house and paying off the loan
- The spouse keeping the house assumes the loan (if lender allows)
Your Options for the House in Divorce
Option 1: One Spouse Keeps the House (Refinances)
How it works: One spouse refinances the mortgage into their name alone, removing the other spouse from liability. The keeping spouse may need to "buy out" the other's equity share.
Requirements: The keeping spouse must qualify for the mortgage on their single income. Credit score, debt-to-income ratio, and employment history all matter.
Best for: Situations where one spouse clearly wants the house AND can afford it alone.
Option 2: Sell the House, Split the Proceeds
How it works: List the house, sell it, pay off the mortgage, and divide remaining equity according to your divorce agreement.
Timeline: Traditional sale takes 30-60 days; cash sale can close in 7-14 days if you need to move quickly.
Best for: Couples who both want a clean break, need to access equity, or can't agree on who keeps the house.
Option 3: One Spouse Keeps Paying (Both Stay on Loan)
How it works: One spouse keeps living in and paying for the house, but both names remain on the mortgage.
Risk: If the paying spouse stops or falls behind, BOTH credit scores suffer. The non-residing spouse has no control but full liability.
Best for: Short-term situations only (until refinancing is possible or house is sold).
Option 4: Neither Can Afford It
Reality: Sometimes a home that was affordable on two incomes isn't affordable on one. If neither spouse can qualify to refinance or afford the payments, you need an exit strategy.
Options: Sell the house (even at a loss is better than foreclosure), short sale if underwater, or deed in lieu of foreclosure as last resort.
What If My Ex Stopped Paying the Mortgage?
This is one of the most common - and devastating - divorce-related mortgage problems. Your ex agreed to pay, but they stopped. Now what?
Immediate Steps to Take
- Contact the lender NOW - Find out exactly how far behind the loan is
- Make the payment yourself if possible - Protect your credit first, fight about money later
- Document everything - You'll need this if you take your ex to court
- Contact your divorce attorney - Violating the divorce agreement has legal consequences
- Explore your options - Can you refinance? Should you push for a sale?
Remember: The lender doesn't care what your divorce decree says. They will report late payments against both of you, and they can foreclose regardless of your agreement.
Can You Afford the House on One Income?
Before fighting to keep the house, honestly assess whether you can afford it. The "28/36 rule" suggests:
- Housing costs should be under 28% of your gross monthly income
- Total debt payments should be under 36% of gross income
Housing costs include: Mortgage payment, property taxes, insurance, HOA fees, and average maintenance costs.
If keeping the house puts you above these thresholds, you're setting yourself up for financial stress - and potentially foreclosure down the road.
Protecting Yourself During Divorce
If You're Keeping the House:
- Refinance as soon as possible to remove your ex from liability
- Get your name on all utility accounts and property records
- Budget carefully - your income is now your only income
- Have a backup plan if you can't make payments
If Your Ex Is Keeping the House:
- Insist on refinancing as part of the divorce agreement with a deadline
- Include language requiring sale if refinancing isn't completed by deadline
- Monitor the mortgage (you can call the lender to check payment status)
- Don't sign a quitclaim deed until you're off the mortgage
When Foreclosure Becomes a Risk
Divorce is one of the leading causes of foreclosure. It happens when:
- Neither spouse can afford the home on one income
- The spouse who agreed to pay stops paying
- Emotional attachment prevents rational financial decisions
- Selling is delayed too long while payments are missed
If you're facing foreclosure during or after divorce, you have options: loan modification, forbearance, short sale, or quick cash sale. The key is acting quickly.
Going Through Divorce and Worried About the House?
We help California homeowners navigate mortgage issues during divorce - whether you want to keep the home, sell quickly, or avoid foreclosure.
Call (949) 565-5285Free, confidential consultation