Getting a divorce means asking a lot of questions, especially about big stuff like your house. There’s no one-size-fits-all answer, since it depends on things like your credit, your mortgage, and what you want to do with the house.
Selling the House
A lot of couples sell their house during a divorce. This gives you both a fresh start and lets you split any equity – the money left after paying off the mortgage and selling costs (about 10% of the price).
Renting the House/Becoming a Landlord
Maybe you don’t want to sell, or you see the house as a future investment. In this case, one of you keeps the house and rents it to the other. Be aware that being a landlord comes with its own work, like handling repairs and making sure your mortgage company allows rentals.
Dealing with Equity and Refinancing
If you’ve paid off a good chunk of your mortgage, you have equity. Here’s how to handle it:
- Buyout: One of you buys the other person’s share of the equity.
- Refinance: One of you gets a new mortgage in your name alone to buy out the other person’s equity. This means you’ll need to qualify based on your income and credit.
- Assumption: Sometimes, one person takes over the whole mortgage and keeps the house. This usually requires the mortgage to be up-to-date and both of you to agree to it. Talk to your lender about this option.
It might sound a bit confusing, but don’t worry! I help people with situations like this all the time. Now that you understand the basics, you’re a step closer to making the right decisions for yourself.