Divorce is undoubtedly an extremely difficult time in someone’s life. Not only does it require a dramatic restructuring of your daily life, but it also demands attention to what’s often a tightly-tied financial history. The first step to starting a new, fresh chapter in one’s life is dealing with the real estate issues that arise in a divorce situation—namely what to do with the house.
When couples who own a home together split up, there are a number of options available to them when it come to their existing mortgage. You can find the most common options here. Unless the couple plans to keep the existing financing, which requires close coordination to orchestrate payments, upkeep, and tax fulfillment while limiting homebuying options for one party, all of these choices require one common thing: a firm idea of the property’s value.
In a divorce scenario, an agreement as to the current market value of a home is an essential step in deciding what can be done with mortgage financing. Here are a few ways you can determine the value of your home and considerations for each method:
Once you have a reliable idea of your home’s value, it will open the door for determining the next feasible step for your situation. You will be more aware of what a split in an equity stake would yield you in the case of a property sale or an equity buy-out refinance, and the divorce settlement agreement can more accurately define the terms of a future mortgage payment in the event that you and your spouse are keeping any existing financing.
Want to learn more about the mortgage issues you should consider during a divorce? Download our Divorcing Your Mortgage eBook below!