How to Pay Down on a House After a Divorce

Re-examine your finances to pay your mortgage post-divorce.

Even if you manage to keep your house in a divorce, you are faced with the challenge of paying it off without the benefit of a second income. Divorce proceedings are financially draining with legal fees, alimony, child support and division of assets. The expense to buy out your spouse's interest in your marital residence exacerbates the strain. To get by in your post-divorce era, you may have to rework your budget to fit your new lifestyle.

Instructions

1. Refinance your loan at a rate and term that are manageable post-divorce. This is necessary to remove all interest your spouse has in the property.

2. Create a budget to account for the loss of your spouse's income and any extra expenses such as alimony or child support. Start with your gross monthly income, then deduct mortgage, utilities, insurance, auto payments and miscellaneous living expenses. If you have little to no money left after these deductions, you likely do not have the ability to sustain the payments.

3. Make your minimum payment on time every month. Do not put any extra toward principal at this time.

4. Set aside money each month in a savings account. Create a savings goal -- $100 per month, for example -- and stick to it as best you can. Once you have a reasonable amount set aside for emergencies, begin to consider paying extra on your mortgage.

5. Add extra principal payments to your mortgage each month after you have built some savings. Continue to put money into your savings, but include whatever extra you can in paying the mortgage. As you pay more principal, more of the regular payment will go toward the balance each month, enabling you to pay down the mortgage faster.

References

• U.S. Bank: After a Divorce: Achieving Your Financial Goals
• New York Divorce: Surviving Financially After a Divorce
• Love Money: How a Divorce Affects Your Mortgage; John Fitzsimmons; May 2009