Divorces can be messy, arduous affairs, especially once deciding the future of a couple’s shared assets comes into play. One of the biggest hassles is deciding what to do with your shared family home. There are various ways this could go, and here are a few examples.
Sell and Split
This is the cleanest method for divorced couples looking to leave a home full of painful memories behind and start fresh elsewhere, albeit with much-needed income to boost the process. Mutually agreeing to sell and evenly split the profits enables both exes to find common ground in a clean separation, making the entire process less frustrating. This typically occurs when a couple has children they want to both protect, but it also happens amongst divorcees with no offspring. While it would be painful to leave a house full of memories behind, sometimes it’s best not to remain where they can haunt you of the good old days. Bear in mind that there will be disposition costs, including real estate commissions, lawyer fees, and other closing costs.
One of You Keeps the Property
In the event of one spouse wishing to keep the family home and the other agreeing to be free of any financial responsibility tied to it, there will be work to do. The main thing to take care of is any mortgage that might be on the home, as it will have to be refinanced in the name of the spouse staying there. Also, whoever keeps the property may need to buy out the other spouse, and this amount can vary depending on the home’s equity. This amount is negotiable, so it is best to remain on even footing during this process for a fair resolution, considering the future taxes, fees, and potential appreciation of the property when planning a buyout. Apply logic and reason to this scenario, however, as it only makes sense that both of you walk away from the agreement capable of being able to financially fulfill basic needs to survive separately. Also consider the needs of any children, as a divorce often affects more than just the two spouses.
Spousal Separation Mortgage
If one spouse wishes to maintain ownership of the home, one option is to secure a spousal separation mortgage. This mortgage can be secured for up to 95% of the value of the home, while the 5% down payment comes from the existing equity put into the home. In order to qualify for a spousal separation mortgage, you must have good credit, be able to afford the mortgage on your income alone, both spouses must be owners of the property, and present a signed separation agreement and a signed offer to purchase from one spouse to the other. Contact Court Coach LLP to draft a separation agreement or provide independent legal advice regarding any separation agreement you are asked to sign.
In the event that both spouses can’t come to a mutual agreement regarding the property, it can remain cooperatively owned as a joint asset. Sometimes this is the best way to minimize stress and financial damages from the divorce, but it is imperative that both exes figure out whether they want to stay financially attached to one another. Also, it is crucial that both parties can trust one another with this responsibility, as the various maintenance expenses, taxes, and other payments associated with home ownership don???t vanish once the couple divorces.
In the end, the outcome of a divorced couple’s shared home depends on how they are willing to cooperate with one another. Depending on how strained or cooled tensions are, the result could vary. With that in mind, considering these options in advance might help make this difficult decision easier to endure.