How to Divide a Home's Equity After a Divorce

When it comes time to split your marital assets in a divorce, one of the biggest decisions you will need to make is what to do with your marital home. If this home was purchased by you and your ex-spouse while you were married, it will be considered marital property and subject to division. It can be difficult to figure out the best way to divide a home as both of you may want to keep the house to continue to raise your children in their childhood home. Today, we go over various ways to divide a home’s equity after a divorce.

Options for Dividing Equity in a Home

Here are some ways to divide equity in a home after a divorce:

Sell the house and split the proceeds

This is probably the easiest way to go about dividing your house. You and your spouse can hire a real estate professional to help you sell your home and then divide the proceeds. This is the best option if you do not want to interact with your spouse often or share a living space with him/her. Remember you will need to pay off your mortgage, closing costs, moving costs, and your realtor as well.

One ex-spouse keeps the home and refinances the mortgage

Another option is to have one spouse keep the house and become the sole owner. If you decide to move forward with this step, the spouse who keeps the house may want to refinance the mortgage. Doing so removes the other spouse from the mortgage so the home is no longer a joint asset.

It is important to note that the spouse who will take over the house will need to qualify for their mortgage based on their income alone. Also, he/she will need to buy out their ex-spouse’s share of equity in the home as well.

It is important to note that when the sale of the house is reserved, the spouse that decides to stay in the house until it is ready to be sold will be responsible for all the expenses associated with the upkeep of the house until then.

Both former spouses keep the house temporarily

It may not be the best time to sell your home right after a divorce. Maybe you were in the middle of a remodel or your children are still very young, and you do not want to move them out of the marital home.

Offset other marital assets

In the event you do not want to sell the house and divide the proceeds from this sale, one party can keep the house in exchange for another asset. This asset’s value should be equivalent to the amount they would have received had the house been sold. For example, if one party decides to keep the house, the other could keep a retirement account.

How to Determine Equity

Hire a real estate agent to do a valuation of your home

To determine equity, you can hire a real estate agent to do a comparative market analysis of your home. This includes comparing the value of your home with other homes in your neighborhood that are for sale or have recently been sold.

Hire a licensed appraiser to complete an analysis to determine the house’s value

An appraisal will consider multiple factors that could affect the overall value of your home, including but not limited to your home’s amenities, current market trends, and the square footage of your home.

Contact our office online or call us via 727-312-1112 to schedule a consultation to discuss your divorce case.


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