What will happen to the family home during the divorce process may result in some anxiety for divorcing couples. It is helpful to address those concerns by knowing how a family home may be divided during the divorce process and property division process. There are several ways of dividing the value of a home when a couple divorces.
Sell the house and split the proceeds of the sale
Once the home is sold, the former spouses can pay the mortgage debt and any taxes and then share the proceeds of the sale of the home. It will be necessary to determine the value of the home through one or more appraisals.
One of the ex-spouses keeps the home
One of the ex-spouses keeps the home and refinances it so the other ex-spouse is removed from the mortgage. There are several benefits to refinancing the mortgage when one spouse decides to keep the home including removing the other former spouse from the mortgage so the home is no longer jointly held; paying off outstanding debt on the mortgage and replacing the mortgage with a new loan with the spouse retaining the home on the new loan; and freeing up cash so that the former spouse’s share of the equity can be bought out.
Both spouses may keep the home
Both spouses may keep the home for a period of time. Sometimes the divorcing couple may owe more on the home that it is worth, making it a poor time to sell or refinance. In other circumstances, the divorcing couple may not be able to afford separate homes so continue in the family home for a period of time. Another option is if one parent remains in the family home to raise minor children and the home is sold once the children are grown.
Generally, there are three common options to divide a home during divorce. Divorcing couples should be familiar with these options so they can determine which is best for them.