When couples in Virginia separate or are ready to get a divorce, they may have a home they need to sell or that one person wants to keep. There are several factors to keep in mind at this stage. One is that neither person may be able to afford the house on a single income once they look at a monthly budget.
A common error is not changing the deed when refinancing the mortgage so the spouse who is not keeping the home no longer has liability for the mortgage. While couples may do this in an effort to save on costs, it is always best to retitle the property into the name of the spouse keeping it. When there is equity in the house, the spouse keeping the house may have to buy out the other spouse’s interest with the refinaning. An important warning to a spouse wanting to keep the house and refinance to buy out the other spouse: get prequalified by an experienced mortgage broker as soon as possible so you know for sure you can borrrow enough money to pay off the existing balance and fund any agreed upon equity buy out.
In some cases, exchanging the equity in the home and its ownership for another asset with value might make sense for a family. For example, one spouse might take other assets, such as a retirement account, to keep the division fair. However, if this is the case, people must be careful when looking at these assets to ensure that they are of roughly equal value. A spouse keeping a house has to consider the expenses associated with it that the retirement account does not. In some cases, a more liquid asset could be more valuable to a spouse than a home.
Selling the house as soon as possible is another option. Many couples can negotiate this amicably and by agreement. When there is no agreement to sell the house, a Virginia divorce court can order it be sold. When the house is sold each person will receive their part of any equity after all the costs of sale have been deducted from the selling price. It can take a lot of time for a house to sell and close.
Keeping the house and “Nesting” is an option that lets parents to stay in the house with the children. This requires a high degree of cooperation between parents, who take turns living there while the children remain there full time. While the parents are “nesting” with the children it is important to have a detailed agreement about sharing expenses to maintain the house. Mortgages have to be made and repairs both routine and emergency have to be made. With this arrangement, a couple might agree to sell the home at a later date.
Spouses should negotiate an agreement for their property division which includes all the details needed to deal with their home in their divorce.