Aside from the emotional aspects of divorce, things can get even more complicated when spouses own property together. The good news is that there are options for couples going through a divorce and jointly on a chester county mortgage company.

Chester County Mortgage Company: What Happens to a Mortgage During a Divorce

As Penn Street Mortgage, our team of qualified mortgage advisors in Chester can help you through this challenging situation. Options for divorcing couples depend on the following factors:

How the home was titled and financed from a Chester County Mortgage Company

When determining mortgage assets for divorcing couples, the first thing to consider is how a home is titled and financed. If the spouse staying in the home has the title and mortgage, no additional steps are needed. This is usually the simplest way to handle things. If the home has risen in value since purchasing, the departing spouse might ask for a portion of the home’s equity. 


However, if the title and mortgage are in both spouses’ names, the mortgage needs to be refinanced. This can be a more complicated process and requires a new settlement deed. Luckily, your local chester county mortgage company can help.

Whether one or both want to stay in the residence

If there’s no agreement created, and both spouses want to remain, attorneys may have to get involved. Attorneys divide assets or determine how the house splits among the two parties.  Both parties must sell the property and split the equity unless agreed upon otherwise.

 If the two parties can reach an agreement and one spouse wants to stay in the house, they will simply follow the above steps.

The amount of equity in the home according to a Chester County Mortgage Company

Another thing considered when divorcing couples are splitting a house is the amount of equity in the home, if any. If there is equity in the home, the spouse staying in the home may have to pay a lump sum. This goes to the spouse leaving home equal to the value of the equity.  In most cases, the amount due is based on a formula that follows the following: 

The Formula

The market or appraised value of the home – selling costs (including realtor fees, transfer tax, potential repairs) – mortgage balances = total equity available to cash out

the calculation and determined split will be outlined in the Property Settlement Agreement.  Usually, the equity split is 50/50 between spouses, but this could change based on the couple’s other assets or liabilities. 

If a couple agrees to cash out on the home’s equity, they will have to refinance the mortgage to access that capital.  There are two types of refinances — rate/term and cash-out refinancing.

Ability to qualify for a refinance using a Chester County Mortgage Company

With an agreement reached by two parties, the spouse that will stay in the home must qualify to refinance the home. Multiple factors go into consideration when refinancing. And it’s often very similar to obtaining a mortgage for a new home. These are the key factors taken into account when qualifying for a mortgage:


Divorce is a complicated and confusing time for many as they navigate their new normal. If you and your spouse co-own property, contact the experts at Penn Street Mortgage who can walk you through your options.

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