blog, uncategorized
June 8, 2021
R. Clarke Speaks

What Happens to a House in a Divorce?

Schedule a Consultation Today
Read Full Post

When going through a divorce, there is no shortage of things to worry about. The divorce process can be long, frustrating, and confusing, but one of the most important things to iron out — from the beginning — is what happens to a house in a divorce.

Allocating Equity

In most cases, the court will equally allocate the equity of your home between parties. If, for example, one of the partners is remaining in the home, the other one may receive assets of the same value. If they don’t have any additional assets whose value is equivalent to the home, they must determine a way to buy out the other spouse.

If there is enough equity in the home, the spouse retaining it may perform a cash-out refinance on the mortgage. They may pay the other spouse a sum equivalent to their interest in the house. This amount is achieved after paying commissions and refinance fees. If the mortgage balance is above the house value, the parties may consider a short sale. If it isn’t a viable option, the parties should discuss it with their mortgage lenders.

The lender may forgive part of or the entire balance on the sale. Another option is for the parties to sell the house and split the remaining liability to their lender. Funds from the sale of the house may also be used in paying the marital debt. The specifics of the split depend on the circumstances of the divorce.

Paying Mortgage After Divorce

When dividing marital property, the court pays special attention to the family home. It is typically awarded to the spouse who will be residing with the children most of the time. However, it isn’t the only consideration.

Another factor that comes to play is if the parties will afford the expenses of maintaining the home and the extra costs of a second home for the ex-partner. If one spouse has high earnings, they may be ordered to keep paying part or the entire mortgage for the spouse with low income.

If the mortgage were in both their names, the title transfer from one spouse to another wouldn’t affect the continued obligation for both of them. The most effective way of excluding one of the spouses from the mortgage is by a refinance. However, the party retaining the house may be unable to qualify for a refinance. The terms and interest rates may also be unfavorable.

If the House Is Separately Owned by One of the Spouses

If one of the divorcing spouses owned the home before the marriage and hasn’t transferred ownership to their partner, the house will be considered their separate property. Therefore, the court cannot award it to the other spouse. However, an increase in the house value may be viewed as a marital asset. It may be divided among the two spouses during a spouse.

Divorce laws are complicated and continuously changing. If you have any questions or need representation, you need a Wilmington Divorce Attorney as soon as possible. Give us a call today and get answers to your questions.

© Copyrights 2022. Speaks Family Law Firm. All Rights Reserved.
The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.

Speaks Law Firm, PC Family Law Division
300 N. 3rd St. Suite 310
Wilmington, NC 28401

(910) 769-7339https://speaksfamilylaw.com/

Questions or Schedule An Appointment?

Call (910) 769-7339

Hours of Operations

Open: Mon - Fri: 8:30AM - 5:30PM

We focus on each case like it is our only case. We thrive on finding creative, comprehensive and effective ways to exceed client expectations. We adhere to the highest standards of ethical conduct.
© Copyrights 2022. Speaks Family Law Firm. All Rights Reserved.

This website and the information contained here within is provided by Speaks Family Law as a service to clients and friends. It is not intended to be a solicitation or to render legal advice. Contained in the website is information about legal issues and legal developments. Content provided is for informational purposes only and may not reflect the most current legal developments. The content is not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on specific legal problems.

Use of this website or the information provided by this website, including contacting one of our attorneys, does not create an attorney-client relationship between you and the firm. Prior to the acceptance of a new client or matter, the firm must conduct a search for possible conflicts of interest (already representing another party involved in the matter), and obtain a signed engagement letter. This website should not be used to provide confidential information about a legal matter. This website may provide links to third-party websites. Such linked websites are not under the control of Speaks Family Law and the firm assumes no responsibility for the accuracy of the contents of such websites.

Call Us
Email Us