4 Reasons to Keep the Home during a Divorce

If you are entering divorce proceedings, division of assets leads to a discussion of whether to keep the home after divorce. In many cases, it is simply easiest to sell the property and split either the proceeds or the debt between the two parties. This prevents arguments in many cases where ownership of the home is not clear. However, if you consider the benefits of staying in the home, you will learn there are many reasons to attempt to preserve ownership. 

#1 You Can Refinance a Loan

It is not ideal to have to go through the refinancing process. But, if one of the two parties could potentially continue making mortgage payments on the property, it is worthwhile to consider this option. The loan can be refinanced to the name of just the man or woman. Since the couple has likely paid down a significant portion of the debt in the home, the refinancing loan needed to cover the remaining mortgage will be much smaller than the original mortgage. This means the mortgage payments can be manageable for just one party. When this occurs, the other ex-spouse has no continued obligation to the loan or debt on the home.

#2 You Can Remove a Name from a Title

If both of your names are on the title to your property, a simple switch with the County Registrar can make a change to one name. With the signatures of both parties and/or the lien holder on the mortgage, this can be achieved for only a small fee. This would remove one spouse from any potential gains from the property in the future. For the spouse maintaining ownership, it is essential to know that continuing to make mortgage payments will directly contribute to his or her personal equity in the home and not an ex-spouse's claim.

#3 Ownership May be Clear

Perhaps the biggest road block to keeping ownership of a home is the question of which individual should keep the property. There are many ways to handle this issue. For example, one party can reimburse the other, or assets can be divided fairly. However, in some scenarios, there is a very clear picture of who should continue to own the home. For example, if there are children involved and one party has custody, a judge will typically permit that person to retain ownership of the home. If only one person made mortgage payments, this individual may again be the clear rightful owner. If ownership is clearly established, then keeping the home is a simple solution.

#4 Strong Financial Decision

The time you choose to sell your home will have a large impact on your financial stability in the future. Right after a divorce, your credit may drop, you may lose money in the court system, and you may simply have a hard time affording a new home. It does not make sense to back out of the equity you have built in your current residence for this type of scenario. Furthermore, the market may be unfavorable. Financially, if it makes far more sense to keep the property, remove emotion from the decision and stay in the home for practical reasons.

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