Dividing Your Dream Home in a Divorce
13 June 2018IN: Family Law
You and your spouse purchased your dream home. You have spent years decorating and making improvements. Your children attend school nearby and have made friends in the neighborhood. You think everything is perfect until your suburban dream is shattered when you are served with a divorce action. Typically, parties will agree to sell their home and divide the proceeds in an equitable manner. However, if you wish to retain the home there are some options available and steps you need to take.
Know the Value of your Home
Obtain an appraisal of the your home from a licensed appraiser. An appraiser will stand behind their valuation and may be used to testify in court. Do not rely upon online appraisal sites or tax appraisals which may not be accurate.
Know the Debt Payoff
Obtain the payoff amount of your mortgage from your lender and determine whether the payments are current. It is important to know whether the spouse in charge of paying bills has actually been making the payments. You should also obtain the payoff amount of any Home Equity Line of Credit and be aware of any tax liens.
Determine your Ability to Refinance the Mortgage
Speak with a mortgage lender to see if you qualify to refinance the mortgage into your name. This will be necessary to relieve your spouse of liability from the mortgage. Also, determine if you qualify to borrow additional funds necessary to pay a portion of the equity to your spouse. Equity is the amount remaining after subtracting the amount of debt from the value of your home. You may pay half of the amount of equity to your spouse or some other negotiated or equitable amount.
Retaining Equity as Alimony or Property Division
You may be able to retain all the equity by designating your spouse’s portion as alimony in solido rather than receiving monthly alimony payments or in addition to monthly alimony payments. It may also be appropriate to retain your spouse’s portion of the equity in exchange for other assets. A thorough examination of the marital estate will determine will determine whether alimony or an offset are appropriate.