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3 ways to handle the family home in a divorce

On Behalf of | Nov 16, 2023 | Divorce

Divorce brings about many decisions, and a significant consideration is what to do with the family home. For couples parting ways, the question of whether to sell the home immediately, have one party refinance the mortgage or wait for market conditions to improve can be complex.

Each option comes with its own set of implications, and making the right choice requires careful consideration of both financial and emotional factors.

Selling the home

Selling the home outright is a common choice for divorcing couples looking to sever financial ties. In fact, Smart Agents reports that 61% of divorcing parties choose to sell their homes when they divorce. While this option provides a straightforward resolution, it is important to be mindful of market conditions and potential financial implications, including transaction costs and taxes.

Refinancing the mortgage

Another option involves one party retaining ownership of the home by refinancing the mortgage in his or her name alone. This can be a viable solution when one spouse wishes to remain in the home, especially if there are children involved. However, the party seeking to keep the home must qualify for a mortgage independently, which may prove challenging depending on their financial situation. Additionally, refinancing may require a buyout of the other party’s share of the home’s equity.

Waiting to sell

For couples who can maintain amicable relations and are in a position to wait, delaying the sale until market conditions improve might be a strategic move. While this option carries the risk of extended financial ties and potential market uncertainties, it can yield a higher sale price if real estate values are likely to rise. Patience and a clear understanding of the local real estate market are key when choosing to wait before selling the family home.

Each choice comes with its own set of considerations, and the right decision depends on the unique circumstances of the divorcing couple.