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How should you divide your home?

| Apr 11, 2021 | Divorce |

Buying a home with your spouse can be one of the most important decisions you make throughout your marriage. Unfortunately, when you divorce, you have to think about how to split the house. Will one of you keep it? Will you both sell it?

According to Nerdwallet, you can either sell the home, refinance it to decide to share the home temporarily.

Refinance the mortgage

One of the most common ways to divide a home is for one of the partners to become the sole owner. You or your ex would refinance the mortgage to remove the other from the mortgage so that the house is not a joint asset. When you refinance, you can pay off the mortgage debt and replace it with a new loan. This frees up cash so that you can buy the other share of the equity. The individual who refinances should be the one who can afford the home solely.

Sell the home

One of the cleanest ways to sever your relationship with your spouse and the house is to sell it. The two of you would put the house on the market and then split the proceeds after. In some cases, you may hang onto the home temporarily. You may choose this option for the children or because you want to wait until the home increases in value. Joint equity works until the two of you decide to sell the house or one of you buys out the other’s share.

Instead of splitting the value of the home in cash, you can also use assets such as vehicles or retirement funds.