Wednesday, 18 October 2017

What Happens to a House During Divorce?

Written by Posted On Wednesday, 13 January 2016 17:16

Divorcing couples are tasked with the painstaking process of dividing up all of their debts and assets in a way that is fair and equitable. Property division is rarely easy and often results in disputes between spouses. 

Typically, the greatest asset a couple has is their family home. Because of its high value, couples often disagree on how to treat their house during the divorce process. Although options may be limited, couples can work together to find a practical solution involving their marital home during divorce.

Carefully Weigh Your Options

Before coming up with a plan regarding your home, consult with a divorce attorney for help. He or she will be able to present the options available to you and advise you on which one is the most sensible choice given your unique circumstances.

If you are financially capable, you may decide to buyout your spouse’s interests in your property. This would require you to take out a loan large enough to pay off the existing mortgage on the house and pay your spouse their share of equity in the home.

Sometimes it is not feasible or practical to secure a loan that pays off the balance of your mortgage and spouse’s equity share. In these circumstances, you and your spouse can place the home for sale. If it sells after your divorce, your marriage settlement can specify how you will split the proceeds of your home’s sale.

If you and your spouse do not want to sell, you may agree to keep the home as co-owners. While this allows you both to keep a financial interest in the home, it can also present potential problems if your spouse falls behind on their share of the mortgage payments.

Determine Your Home’s Equity

Before making any final decisions, it is a good idea to have a solid understanding of the amount of equity in your home. Your divorce attorney can refer you to a real estate appraiser who can give an accurate estimate as to the value of your property. This is often a better approach to valuing your property than relying on the divorce court to do so for you.  

It is important for you and your spouse to agree on the amount of equity in your home since it will ultimately be divided up between the both of you.

Dividing Your Home’s Equity

After you’ve made a determination of your home’s equity, you can begin negotiating how to divide it between the two of you. If you and your spouse purchased the home together and equally contributed to mortgage payments, a 50/50 split is a reasonable and fair solution. However, if the home was owned by one spouse prior to marriage or there was an imbalance in payment contributions, a different arrangement may be more suitable. If you cannot agree with your spouse how to treat your home’s equity during divorce, you may benefit from the help of a divorce attorney. They can handle the negotiations on your behalf and help you achieve an outcome that is fair and equitable.  

 

  

Rate this item
(0 votes)

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.

Search