For many couples considering a divorce, the biggest concern is often the marital house. After all, a home is the biggest purchase most couples ever make, and the slowly accrued equity in the home can represent a substantial amount of the income of both spouses over the course of many years or even decades. Generally, the courts do their best to ensure that the equity in the home gets fairly divided during a divorce.
There are certain situations in which both spouses will not have a claim to the marital house. If one spouse owned the home outright before the marriage, the non-owner likely won't have any claim to the home or the equity established in it.
The courts would view the home as individual or separate property not subject to division. This is also true if the marital home was left specifically to one spouse as part of an inheritance. In almost any other situation, the home and its equity will end up divided in divorce.
Custody arrangements can impact the asset allocation process
Any court decisions about child custody can impact decisions about the marital home as well. For example, if the custodial parent is able to pay the mortgage and qualify for financing without his or her spouse, the courts may allow the custodial parent to stay in the home. The idea here is to minimize disruption to the lives of the children by allowing them to stay in a familiar space and to attend the same school.
Because the home is community property subject to division, simply being allowed to live there doesn't mean one spouse gets all the value from the home. The spouse who gets the house will refinance the home, cashing out an appropriate amount of equity for the other parent. In some cases, instead of taking equity out of the home, the courts will simply allocate other assets of comparable value to the non-custodial spouse.
Sometimes, neither party gets the keep the house
If there are a lot of marital debts or insufficient other assets to allow for a fair division process with one spouse keeping the home, the courts may order the couple to sell the house. This is actually a very common practice, especially if one spouse can't qualify for the mortgage on his or her own or the mortgage is underwater. If you and your spouse owe more than the home is worth, you may have to sell the home via a short sale by working with your lender.
It can be sad to have to move out of the home you've lived in for years. However, doing so can be part of moving on with your life after a divorce. Instead of grieving, look at this change as an opportunity to make new memories and start building a better life on your own.
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