California homeowners who are getting a divorce should handle their home mortgages with care. Refinancing a mortgage may be the best way to protect one’s financial future and a home, which usually is a couple’s most valuable asset.

Refinancing is ideal because it can help protect one’s credit. Removing one’s name does not eliminate the responsibility for the mortgage. Even though one ex-spouse could buy out the other’s ownership interests in the home, both parties will still be liable for the joint mortgage if the home is not sold.

There are multiple options to consider if someone wants to keep their home and buy out their soon-to-be-ex-spouse. Other assets, such as a larger percentage of retirement funds or bank accounts, can offset the equity in the home. If the spouse who wants to buy out the other spouse has a lower income, they can relinquish any alimony to which they may be legally entitled in order to have sole possession of the home. A cash-out refinance, which uses the home equity to obtain a new mortgage that exceeds the amount of the existing mortgage, may also be as a source for buyout funds.

The equity in a home can also be a way for homeowners to take advantage of low-cost capital. The ready cash can be a great help to a divorcing couple with valuable property and little cash on hand.

A family law attorney may assist clients with the property division process. If necessary, the attorney could use litigation to protect a client’s interest regarding the dividing of retirement plans and real estate.