In many divorce matters, parties own a house jointly. When a married couple owns a home together, this is known by tenancy by the entireties. In these instances, the married couple is also on the mortgage together if the home is not paid off.

After the conclusion of the divorce, one party often gets the house. The other party then moves elsewhere. A remaining issue when this is the case is that the mortgage has to be refinance to remove the other spouse from the mortgage.

This is important for many different reasons. First, the spouse who is not getting the house, does not generally want to remain on the mortgage. Otherwise, it can impact their credit rating adversely. There is always a risk as well that if the spouse keeping the house were to default on the mortgage, they could be subject to foreclosure proceedings as well.

Second, the spouse keeping the house generally does not want the spouse they divorced on the mortgage as well. The reason is this would tie the two financially together. They would also have potential tax issues to deal with the mortgage deduction and property taxes.

As a result, the most common solution to resolve this issue is to have the spouse keeping the house refinance the mortgage to put the mortgage in their sole name. There might be some cases where one spouse is able to assume the mortgage in their name alone through an assumption agreement. If this were possible, this often saves the party keeping the house refinance and closing costs.

Nonetheless, where a refinance is required, it is important that a deadline be set. The deadline protects the party not keeping the house by setting a deadline for the removal of their name. On the other hand, the deadline often needs to be flexible enough in case the party keeping the house has any trouble obtaining a refinance.

Coming up with a reasonable deadline is often tricky. Where party are about to negotiate this, they range might be between 30-days on a short-end to a year on the long-end. Often the deadline is set somewhere in the middle.

When courts have to resolve this issue at trial, they have the ability to select a deadline of their own. The deadline can have a lot of variance, but it’s usually important for some deadline to be set by the court. A reasonable deadline can give a party the time to find a mortgage with interest rates and refinance costs that are beneficial.