Featured News 2016 What to Do With a House in a Divorce

What to Do With a House in a Divorce

Statistically, half of marriages end in divorce and in recent years, there's been a surge in "gray divorces" according to research from Bowling Green State University. As if ending a marriage was not enough, if spouses own a home together, they must decide what to do with it in a divorce.

Often, a modest home in the United States can cost upwards of $200,000, and significantly more if you live in a place like New York City, Silicon Valley or Southern California. That being said, a marital home is often the largest joint asset that a divorcing couple owns.

Now, you have to decide what to do with the house. Do you stay in the home? Or, does your ex buy you out of your share? Since circumstances and real estate markets vary widely, we don't have a one-size-fits-all answer, but there are several options, any of which may be suitable to you.

What are my options?

Depending on your situation, your optimal solution will come down to one of these options:

  1. Sell the house and split the profits with your ex (least messy solution).
  2. Buy out your spouse, or have them buy you out.
  3. Live in the home together until the house sells (not generally recommended).
  4. Remain co-owners and rent the house out.

Most financial advisors suggest going with option #1. It's the best way to simplify matters. Each spouse gets their share, and they can walk away without a mortgage lingering over their head.

If you prefer to stay in the home, make sure it's the best financial decision. Would you qualify for a mortgage in your name alone? Do you really need such a big house, or would it be better to move into a condo in the same community? These are some things to think about.

The best way to avoid any messes is to discuss all the what-ifs with a real estate attorney. As long as you consider the worst case scenarios, you'll know how to make the right choice.

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