Who KEEPS THE HOUSE?
As you proceed through the divorce process, one of the questions you will be faced with is who gets to keep the house? In today’s market, with high interest rates and low inventory, the dispute over the house heats up. People are unwilling to part with their low interest rate, or don’t believe they’ll be able to afford a new house and are unwilling to rent. So if both spouses want the house, what do you do?
The first step is to look at whether one or both of you can afford to keep the house. It is likely that an equity buyout will be required as part of the property settlement, so you need to determine if you can afford to pay your spouse a portion of the equity in the house. Depending on how the mortgage is titled, you may or may not need to refinance the remaining mortgage in order to remove your spouse’s name from the loan
If only one party can afford to keep the house, maintain the monthly payments and afford an equity buyout, then that person may be successful in being awarded the home.
If both parties can afford it, and both parties want the house, the most likely outcome is that the Judge will order the house sold. More than anything, Judges are concerned with equity (“fairness”) and if both parties want the house, then the Judge will likely order that both parties sell it instead and split the equity.
The circumstance in which this is not the general rule is when children are involved. Courts often try to keep the children in their home, so if it is financially plausible for the party with the majority of the parenting time to also keep the home, the Court may rule that parent keep the home over the other.
The issue of the title to the house is not nearly as problematic as the mortgage. Transferring title from one party to another, or removing a person’s name from the title is largely a matter of paperwork. This can be easily achieved without the need for a refinance, sale, or equity buyout.
Like so much of divorce law, the outcome of who keeps the house is largely case specific. For an individualized analysis, contact us for your free consultation.