The home that was purchased during your marriage can become a huge source of stress when you go through a divorce. This is usually the biggest asset that has to be divided during the property division process, but deciding what to do with it isn’t always easy. There are several things to consider and several options to think about.
One of the primary factors that might make some options unfavorable is the balance on the mortgage. You have to consider this, as well as how much equity you have in the home. These factors might make keeping the home unfavorable, so be sure to take a realistic look at what’s possible if this is the case.
Some individuals may decide to sell the home and pay off the mortgage. If there’s anything left once that’s done, you could use it to pay off the joint debts. You could also split up whatever was left.
There’s also the option for one party to buy the other out. This requires a payment that typically equals half of the equity in the home. This would be handled with either a cash payment or the equivalent in other assets as outlined in the property division settlement.
An option that isn’t used as often is that one party, often the one who will have the kids most of the time, remains in the home until the children move out. There isn’t a buyout, and there are major financial considerations, such as how the mortgage and related payments will be handled. Once the kids move out, the house is sold and the profit is split.
There are pros and cons to each of these options. Make sure that you discuss them with your attorney and your accountant so that you understand exactly what’s going to happen with each option.