If you're trying to settle your divorce, here are some of the steps you can take to deal with your house.
Pay Attention to the Mortgage
Dealing with the mortgage is a very important part of property settlement.
Before the divorce is finalized, it's important for both spouses to make sure the mortgage is getting paid even if one has agreed to take it over. Each spouse is legally responsible for the mortgage and can have their credit impacted if the other doesn't pay.
Once the divorce is finalized, you'll usually need to refinance the mortgage to have a spouse removed. That's because the original loan was made assuming both spouses have been paying it off. The good news is that since the balance will be lower, it's usually easier to qualify compared to when you originally bought the house.
Finally, when settling your divorce, remember to subtract the debt from the value of the house. A $300,000 house with a $200,000 mortgage is only a $100,000 asset.
Trade the House for Other Assets
In many divorces, the spouses will agree that one takes the house and the other gets additional cash or other assets. This might be so that the children can keep living in the same house or because one spouse really wants the house.
If child custody is involved, judges will often prefer that the parent with primary custody keeps the house. In other cases, who keeps the house is usually a matter of negotiation. If both spouses want the house, a common settlement is to give the other a larger share of other assets so that both spouses see the settlement as an even trade.
Sell the House
Selling the house is a common option when neither spouse wants the house or there aren't enough other assets to divide. You might sell the house before the divorce is finalized or agree to sell it within a certain number of days and split the proceeds.
When selling a house in a divorce, it's important to make sure that you're getting market value for it. You don't want an accusation that one spouse is accepting a low offer to spite the other spouse.
Your property settlement attorney can help you write an agreement on how to sell your house. This might include using a real estate agent, listing the house for a certain amount of time, and agreeing to take the highest bid.
Contact a property settlement attorney for more information.
