If you are navigating a divorce, there are several options to consider regarding your family home. The best choice for you will depend on your individual priorities, your financial circumstances and many other factors.
Never assume that an approach that has worked for someone else is the best approach for you. Friends and family may give well-meaning advice, but every situation is unique. Consider all of the various options available to you. The following are some common approaches that many divorcing couples embrace. Each may be worth consideration. However, you’ll want to seek personalized guidance before committing to one over the others.
Sell the home and divide the proceeds
This is a straightforward option wherein a couple sells the family home and both spouses divide the proceeds according to their divorce settlement agreement. The sale proceeds can help facilitate a clean financial break. Both people will also need to find housing after the divorce, and the proceeds from the sale may provide a down payment on a new home or capital to pay rent.
One spouse buys the other out
If one spouse doesn’t want to sell and hopes to keep the home, they can buy out their ex’s share of the property. This usually involves refinancing the mortgage to remove the other spouse’s name and sacrificing other marital assets during on the property division process. The refinancing approach is necessary in this scenario because anyone who is named on the mortgage is responsible for payments, even if they’re no longer married to the spouse who has retained ownership of the house in question.
Keep the home through co-ownership
Some divorcing couples choose to continue co-owning their home. This is especially common when they are parents and they want stability for their kids. Maybe the children are in high school and will graduate and go to college in a few years, for instance. This arrangement can be temporary until the children reach a certain age or until the housing market is more favorable for sellers.
If neither you nor your spouse wants to buy out the other or sell the home immediately, you can consider renting the property out and sharing the rental income. This can help cover the mortgage and other expenses. This is another reason for co-ownership, even if you don’t have children.
Each option will result in its own financial and emotional implications, so it’s essential to consider your goals and to make an informed decision. Seeking legal guidance can help you to make whatever choice is right for you at this time.