Divorce is a difficult time for any former couple to go through. This breaking up of a marriage and potentially a family can become a lengthy process, especially when determining everything from the custody of children and pets to how to split up property. If you share a home with your soon-to-be-ex, you have a few options that you can consider for what will happen to the house when the divorce is finalized.
Sell the house.
The easiest option for divorcing couples who share homeownership is to put the house on the market. It’s important to have an understanding of what the marketplace is looking for, wherever you are across the United States. David Lindahl, the founder of RE Mentor, the nation’s leading multifamily real estate education company, encourages buyers and sellers to be wary of any indicators in the marketplace. This is the case regardless of if you’re a first-time seller or are branching out into real estate investing to build your portfolio.
The COVID-19 pandemic did change the game for the real estate market, with many major cities seeing a decline in population as people held inside during lockdown sought extra space out in the suburbs or in rural areas. For a divorcing couple, selling a property might be even easier if you are in a desired emerging suburban or rural community. After the sale, cash return should be split 50-50, unless there is a pre-existing agreement regarding the mortgage on the home or any pre-nuptial arrangement.
One ex keeps the house.
For divorcing couples who have children, exes may decide to let one spouse stay in the house with the children to not have them move, change schools, or distance from friends and family. Divorce lawyers in Birmingham, AL, understand that divorce can be a difficult transition for all parties involved. However, it’s important that, if children are involved, they are prioritized, and any steps taken for custody or with their home are done in their best interest. A divorce attorney will make sure that child custody, child support, and any family-related matters are handled fairly in the eyes of the law.
Rather than selling the house, exes may decide to refinance the mortgage on the home. Refinancing removes the other spouse from the mortgage so the house is no longer a jointly held asset in the eyes of a bank or lender. This could also pay off any outstanding mortgage debt, replacing the old mortgage with a new loan that can be covered over a couple of years. This could also free up extra money to buy out the other ex’s share of the equity. Keep in mind, the spouse taking over the mortgage has to qualify for the new loan based on just their sole income.
Both keep the house.
If a couple is splitting but one ex won’t be able to afford the mortgage even with alimony and child support, divorce lawyers may work out an agreement to keep the house under both spouses’ names. Children are usually the reason for joint ownership in divorce cases, and oftentimes, there’s an agreement in place for a home to be sold upon the kids during 18, or moving out at a certain age. Family lawyers and real estate attorneys can alter this agreement if necessary based on certain matters.
Home equity is distributed in this divorce process with the ex who vacates the home getting a percentage stake of the house when sold on the real estate market, paying a share of the mortgage for now. Through mediation, a settlement can be reached for the long term if adjustments need to be made regarding spousal support or if the condition of the home deteriorates in the hands of one spouse.