Nearly 40% of marriages end in divorce. Chances are that you or someone you know will be touched by this major life transition. If so, the family home is probably the most valuable material asset of your marriage. It can set you up for feast or famine based on your choice to cooperate amicably or battle each other.
Sometimes the easiest solution is to sell the house and split the proceeds. Many couples choose this option when:
• there is a decent amount of equity tied up in the house, and
• the mortgage, tax, maintenance & associated payments are, or may become, too much for one person to carry.
You or your spouse may keep the house through a “buy out.” The selling spouse usually insists on:
• receiving fair market value for his/her share,
• refinancing the mortgage in order that his/her name may be removed from the mortgage, and
• quickly receiving his/her money, usually through increasing the size of the old mortgage.
You could maintain the status quo, the house isn’t sold or refinanced.
Instead, the “move-out” spouse agrees to wait a certain number of years before the house is sold, often a time frame that corresponds with the children leaving home.
The status quo solution may sound attractive, but there are many risks involved.