If you and your spouse in North Carolina have decided to legally separate, you will need to complete a separation agreement. A legal separation agreement outlines issues related to child custody and support, spousal support and property division and is approved by the court.
Why do couples choose legal separation?
Legal separation is often chosen by couples who do not anticipate reconciling but wish to remain married. Some of the reasons couples choose legal separation over divorce include:
- Religious beliefs that do not include divorce as an option
- Financial incentives related to marriage
- Ability to file a petition to resume the marriage with the court if they do reconcile
During a legal separation, neither spouse is allowed to remarry. As the couple negotiates the division of property, one of the big assets is often the family home. When there is still a mortgage on the home, the question of how to approach the mortgage during a legal separation needs to be addressed.
Is a mortgage transfer an option?
While a mortgage transfer is normally not an option in most cases, one of the exceptions is during a legal separation. A mortgage transfer might help a separation agreement when one party will remain in the home. There are other factors to consider, such as the party being financially able to continue to cover the mortgage payments. However, since a marriage transfer during a legal separation does not include the new borrower going through the application process, paying closing costs or risking higher interest rates, it can ease the process for the legal separation agreement.
Remember that there are alternatives to a mortgage transfer, such as going through the application process and getting a new mortgage to buy the property from the other spouse. This might be a better option if the interest rates are better than those on the original mortgage.