The marital residence is frequently the largest (no pun intended) marital asset. The marital home presents various issues: (1) what happens to the equity? (2) who gets it? (3) what if the mortgage is in both names?
While this article can’t answer all possible issues that would arise about the marital residence in a separation, let’s touch briefly on the issues outlined above.
Your Home’s Equity?
When you talk to a divorce lawyer and he or she asks you about your home’s equity, they are generally looking for a number that is the difference between the market value of the house and what you owe on it. For example, let’s say you think your house would sell for $200,000 and you and your spouse owe $75,000 on the mortgage. The equity would be $125,000. Note that this number is before any costs of sale like realtor’s commissions.
Who Get’s the Home?
In general there are three options: (in no particular order) the husband gets it, the wife gets it, or it’s sold and the proceeds of sale are divided in some way.
Which option is best for you will depend on circumstances of your case. For example, if a parent needs to be in the house for the stability of the children, that might be important to the court. It is also important to know if there are enough other assets to get an even distribution if one spouse keeps the house (and its equity).
What about the Mortgage?
This is an important question. If a mortgage is in joint names, judges will want to see the spouse who is being awarded the house take actions to refinance the mortgage so that the credit of the other spouse is not tied up in the house debt.
Tied up with the ability to pay the mortgage are all the cash flow issues such as alimony, postseparation support, and child support. All of these possible claims must be examined in the context of the home and its mortgage.
Do you have questions? Scott Allen is a divorce attorney in Raleigh, NC with over nineteen years of experience in all areas of family law litigation and settlement. He can be reached at 919.863.4183.