What Happens to the House in a Divorce?

November 14, 2022

There is no best answer when it comes to your house in a divorce. But, here are the common ways a divorcing couple can resolve what to do with the house in a divorce.

Selling the House in a Divorce


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. Be aware, the selling costs will be about 10% of the sales price — make sure you factor that in!

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 or a stanger. Be aware that being a landlord comes with its own work, like handling repairs and making sure your mortgage company allows rentals. If you rent it to a stranger, get a lease drafted by a lawyer. And be aware, if your tenant stops paying rent, you will still have to pay the mortgage. If your tenant damages the house, you’ll have to repair it too.

Dealing with Equity and Refinancing


If you’ve paid off a good chunk of your mortgage, or your house is worth more than you owe with inflation, you have equity. Equity is the value of the house minus what remains on the mortgage. Here are some ideas on 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. Its best to refinance if both people are on the mortgage. Divorcing alone does not remove you from the mortgage
  • 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.

When you are ready to make it official, reach out to my office or contact me through my website so I can handle all of the paperwork.