The Truth About Mortgages in Divorce: Who’s Really on the Hook?
One of the most common misconceptions I hear from clients is this: “I’m listed on the mortgage, so I have to keep paying for the house, right?” It makes sense why people think this, especially when a marital home is being divided and one spouse wants to “buy the other out.” But here’s the reality—being on a mortgage doesn’t actually obligate you to pay anything.
Wait, What?
I know, it sounds completely backward. But let’s break it down.
When you take out a loan to buy a home, you sign two separate legal documents:
The Promissory Note – This is the actual agreement to repay the loan. The person (or people) who sign this note are financially responsible for making payments.
The Mortgage – This is what secures the loan to the property itself. It gives the lender the right to take back (foreclose on) the home if the payments aren’t made. A mortgage is not a promise to pay the debt. It’s a security instrument that ensures the lender can reclaim and sell the house if the borrower defaults. That’s it.
How This Plays Out in Divorce
Let’s say a couple bought a home together. The house is titled in both of their names, meaning they both own it. But only one of them actually signed the promissory note. That means:
Both spouses will be listed on the mortgage, because otherwise, the lender wouldn’t be able to repossess the home.
Only the spouse who signed the promissory note is legally obligated to repay the loan.
If the spouse who didn’t sign the note decides to leave, they aren’t financially responsible for the loan, even if they’re listed on the mortgage.
This is why things get tricky when one spouse wants to keep the home after a divorce. People often talk about “refinancing the mortgage” to remove the other spouse from the debt, but what’s actually happening is that the original promissory note is being replaced with a new one. The spouse keeping the home signs a new note (in their name only), and a new mortgage is recorded based on how the property is titled after the divorce.
Why This Matters
Understanding this distinction is critical if you’re going through a divorce and dealing with property division. If you’re not on the note, you’re not liable for the debt. If you are on the note but don’t want to keep the house, you need to make sure the mortgage gets refinanced, or you could still be on the hook even after the divorce.
Dividing assets in a divorce isn’t just about what’s “fair”—it’s about making sure you’re legally protected and set up for financial stability moving forward. That’s where collaborative divorce comes in. Instead of getting tangled up in court battles, we focus on the financial reality of your situation and work out solutions that make sense for everyone involved.
Got questions about your mortgage and divorce? Let’s talk. The right information can save you a whole lot of stress (and money).
