Divorce can be financially and emotionally draining on you. If you’re a homeowner, there are some additional measures to take to ensure you’re in good fiscal shape once you finish the proceedings. Look below to explore what to do with your home after a divorce to help set you up for success.
Sell Your Home and Split the Profits
The most customary practice during divorce proceedings (and one often prescribed by the courts) is that you simply sell your home when you can’t come to an agreement. This option assumes that:
- You have equity in the house.
- It’s considered communal property.
- No prior agreement is in writing.
Typically, the equity is split 50-50 between you and your partner when there’s no prior documentation in place.
Refinance Your Mortgage
If your spouse wishes to move out and have their name removed from the deed, you’ll need to refinance your mortgage. This can be difficult because you were likely approved based on the total of both you and your spouse’s salaries, and you’ll also need to fulfill your lender’s credit score standards. You need to consider any outstanding debts, alimony, and child support payments when settling your finances.
You Might Try and Continue Living Together in the Property
While it may sound impossible, some couples agree to stay together in the home while living separate lives. This may be an option for you if you don’t feel that you can sell your home right away and can’t afford another mortgage. Typically, this is only temporary until you both are sure you’re on firm financial footing and can successfully sell the property.
You May Need To Consider a Short Sale Down the Line
A divorce can take a heavy toll on your finances, and you may suddenly find yourself unable to make your monthly mortgage payments if you’ve taken sole ownership of the property. A short sale is when your lender agrees to let you sell your home for less than what you owe on your mortgage. Explaining your recent financial hardship to your lender is one of the best ways to convince them to approve your short sale.
It can be tough to know what to do with your home after a divorce. Your finances may be the last thing on your mind, but it’s essential to deal with everything as soon as possible so that you don’t create additional headaches for yourself. Understand that you have options on the table to help you make the best possible choice for your situation.