What Happens to a House in a Divorce?

By June 8, 2021 July 21st, 2021 No Comments
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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.