For married couples who own their own homes, figuring out what to do with the house can be one of the most challenging parts of divorce. For many people, their home is more than an address. It contains precious memories and losing the house can be emotionally difficult. Having young children can make things even more complicated.
Determining the fate of the family home in your divorce is not easy, but the options are fairly simple to understand. Basically, there are three options.
Sell the house
Often, the easiest solution is for the divorcing couple to sell the house and split the proceeds. This relieves each spouse of all financial obligations toward the home. Instead, the exes can each find their own housing within their new budgets. The proceeds from the sale can help with this.
One ex keeps the house
One reason a divorcing parent might want to keep the home is to provide the children with as much stability as possible. But an unmarried person with one income can make it difficult to pay the mortgage. So refinancing the mortgage can be a good solution. Not only can refinancing get the house-keeping ex a more manageable monthly payment, but it also removes the other spouse’s name from the mortgage. The second spouse could not be held responsible if the first spouse stops making payments. Finally, refinancing can free up cash that the ex keeping the home can use to pay off the other ex for their share of the home.
Both exes keep the house
If a divorcing couple is still on relatively good terms, they can agree to keep joint ownership of the home. Usually, one spouse would move out and have visitation time with the kids, while the other would continue living at the house with the children. A bad real estate market could be another reason not to sell the house right away. Occasionally, a couple going through a divorce will continue to live together.
For this to work, the exes must agree on how mortgage payments and upkeep costs will be handled.
Finding the right solution for your family
Your preference for what to do with the house depends on your particular needs. You and your ex might disagree about what to do, at least at first.