One of the most significant questions that arise during a divorce is, “Who gets the house in a divorce?” Traditional wedding vows often end with the words “until death do us part.” Unfortunately, it doesn’t always work that way. And the pain of a breakup can last even longer when the parting couple remain partners in a mortgage. So, who gets the house in a divorce? Let’s take a closer look at how both parties in a divorce can deal with their mortgage and make a fresh start.
One Divorce Every 40 Seconds
Sadly, almost half of all US marriages will end in divorce, including 40% of first marriages, 60% of second nuptials, and 70% of third tries, combining for three quarters of a million breakups each year, or one divorce every 40 seconds.
Who Gets the House in a Divorce: A Unique Form of Legal Partnership
When unmarried partners buy a home together, they are legally referred to as joint tenants. Each partner owns half of the property and either partner can sell their interest without permission from the other.
However, in most jurisdictions, married couples hold property as tenants by entirety, which means that they both own the entire property. Neither partner can sell their interest without the agreement of the other. It is easy to see how, in the unhappy aftermath of a separation, this can set the stage for conflict.
When One Party Wants to Stay
In some cases, one party wants to continue living in the family home. This requires a new mortgage, refinancing the property a under a purchase agreement which makes it clear that the departing party is in agreement, and is renouncing any future claim of ownership.
Since the property has likely appreciated during the marriage, the new mortgage requires a new appraisal, to determine how much the remaining party will have to pay to their ex-spouse.
How Much Is It Worth to You?
There is no law that says the departing spouse must settle for half. Whether motivated by money or enmity, some have used this opportunity to find out just how much their ex is willing to pay for that signature on a document affirming that they quit any future claim.
How Much Are We Worth Without Each Other?
Even if when the departing spouse is cooperative, keeping the home may not be feasible. If the couple originally qualified for their mortgage based on both incomes, neither husband or wife may have the separate financial wherewithal to qualify as a single applicant.
While the couple work their way through the legal complexities of both dissolution of marriage and division of marital property, they must still meet every obligation they created as a couple, not the least of which is the old mortgage.
What If I Just Stop Paying?
No matter how good it might feel, neither party can simply stop making mortgage payments. Even after a declaration of divorce, both parties remain equally liable for the full amount of the loan.
Selling a House to a Cash Buyer During Divorce
If both parties want out, the division of property is simple: sell the house and divide the proceeds.
Selling a house to a cash buyer during a divorce can offer a quick and straightforward solution for dividing assets and moving on from the marriage. Cash buyers like us are real estate investors or individuals who have the funds readily available to purchase a property without the need for financing. This can expedite the selling process, as cash transactions often close faster than traditional sales that involve mortgage approvals and inspections.
When selling a house to a cash buyer during a divorce, it’s essential for both parties to agree on the terms of the sale, including the listing price, closing date, and distribution of the proceeds. Working with an attorney experienced in handling divorce-related property sales can help ensure a smooth and fair transaction.
Selling to us can provide a clean break for divorcing couples, allowing them to quickly liquidate the asset and move forward with their separate lives. However, it’s crucial to consider all options and consult with professionals to determine the best course of action based on individual circumstances and goals.
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Buy Out
If one party wants to buy out their ex, they must be sure of their ability to afford the mortgage payments and to deal with taxes, insurance, repairs and other ownership costs.
Before either party can apply for a new mortgage, their separate incomes, assets and debts must be evaluated. One spouse may be counting on alimony as a new source of income, while the other may have to deal with the negative impact of alimony on their debt-to-income ratio.
Why Not Keep Paying This Mortgage?
This is not a viable option. Making a clean break and legally documenting the division of property is essential. Even if the remaining spouse could be certain that the departing spouse would never create a future problem, leaving both names on a mortgage or title will hurt the credit ratings of both parties, and it could prevent both ex-partners from qualifying for a new mortgage.
A division of property settlement accepted by the attorneys for both spouses will clarify, usually through a quitclaim deed, that the departing party has no further ability to obtain a loan or create a lien against the property.
In a divorce, emotions can sometimes overwhelm good behavior, prompting one party to refuse to pay credit card statements or other bills. This is a very bad idea, as it will damage both parties credit. The best course is to avoid conflict, close joint accounts, keep bills current, and set up separate accounts which each party can manage on their own.
Make a Fresh Start
Taking all of this into consideration, who gets the house in a divorce needs to be a mutual decision. However, unless one party is deeply attached to the home, the best disposition is to sell, and to be cooperative during the division of property. This can give both parties a sense of closure, leaving each ready to move on to new lives, rather than clinging to old resentments.
While the question of who gets the house in a divorce can be difficult to navigate on your own, instead of worrying about what will happen next, some of the stress of a divorce can be mitigated by talking openly with an attorney and a financial advisor. These professionals have been there before. They know how to help their clients resolve old business and make a fresh start.