When a couple decides to end their marriage, the question of who keeps the house can be one of the most challenging to resolve. Understanding your options can help you make the right decision for your situation. What options should you consider?
You may choose to sell your home.
For many couples, selling their house and dividing the money they receive is often the cleanest way to handle the house. Converting the property into liquid assets allows couples to easily divide them along with their savings. This method can be particularly appealing if neither spouse wants to or can afford to keep the home on their own.
One spouse may choose to buy out the other’s share in the home.
A buyout can be an attractive option if one spouse has a strong emotional attachment to the home or if there are children involved and stability is a priority. They may exchange funds from their savings, or they may trade other assets to reach a fair solution.
This often involves refinancing the mortgage to remove the other spouse from the loan and from the title to the property. The spouse who keeps the home will need to have the financial capability to afford the mortgage on their own.
You may may co-own your home even after you finalize your divorce.
Some divorcing couples choose to keep the property and co-own it, even after the divorce. This can be a long-term decision. It may also be a temporary arrangement until you reach a certain milestone, such as waiting for the market to improve or waiting for children to reach a certain age.
Co-owning requires a good deal of cooperation and trust. It is important that both parties are committed to maintaining the property, and you may want to have an agreement in place to define how you will handle maintenance. You should also have equal commitment making timely payments because if either misses a payment, that missed payment can impact both of your credit scores. In any scenario, the key is clear communication and a willingness to work towards a solution that respects the interests of both parties.
How you handle the division of your assets – including your home – can set the tone for your post-divorce life. Understanding your options can help you make an informed decision during this stressful process.