Among the many challenges divorcing couples face is the property division settlement portion of their divorce agreement. Spouses must decide how they will split any shared assets. In this process, however, they must also decide how they will split any shared debts. When it comes to a family home, it is not uncommon for one person to wish to keep the house once the divorce has been finalized. This desire may stem from a wish to provide stability for young children or simply from a fondness for the home, especially if a lot of work has been done on it. Regardless of the reason, keeping a house after a divorce is a big decision that requires understanding all of the factors involved.
As explained by Forbes, one thing that couples will need to determine whether they sell or keep a home is the valuation of the property. This can be a bit challenging to align on as many things may influence a home value. All first mortgages, home equity lines of credit or other liens should be taken into consideration when making this determination.
If a couple is able to agree on a value for the home and land and one person still wants to keep the home, that spouse will need to figure out how to buy the other person out. Some couples arrange this as part of their larger property division settlement, so the other spouse receives different assets of a similar value. The final divorce decree should outline all such agreements.
However, the joint mortgage must still be addressed as a bank will consider any party on an active home loan as responsible for the debt, per The Mortgage Loan.