How to Buy Out Home Equity in a Divorce
With a home being a bankable asset for both spouses, it is important to know ways which allow you to retain your residence. In return you will need to pay your ex-spouse his or her due share of the equity.
Instructions
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1
Hire a lawyer
Hire an experienced lawyer who has specialized knowledge in divorce settlement cases. A legal person will be in a better position to advise you on how to buy out, or consider other viable options. -
2
Selling the house
Normally, both spouses are entitled to split the profits resulting from the sale of the property. However, there are certain issues which you will need to take into account, such as what if one spouse is not in favor of selling? or who gets to stay in the house till its sold?
Moreover you will be deciding on who will be paying for expenses related to mortgages, utilities and property taxes etc. Both spouses will need to choose a real estate agent whom they trust mutually and assign him/her the task of accepting and reviewing offers. If these issues cannot be resolved, chances are that the judge or court will do it for you. -
3
Buy your spouse out or home retained by one partner
You can also pursue a mortgage option where you pay-off your spouse’s share, which in most cases will be half of the home equity. If you do not have the money, you can easily trade it with your retirement money or any other assets which you have. One can further make payments on a monthly basis for a certain number of years to retain the right of owing the house. You will be required to sign a promissory note to the selling spouse.
The scenario changes when children are involved. If a spouse ( for instance husband) permits the other to stay in the home with kids, then the other ( wife) may need to buy out her husband’s interest. In certain cases the spouse living in the home will inform the mortgage-financer to remove the other spouse from any financial obligations related to home.
Courts can also order one spouse to stay in the house until the children reach a certain age, before ordering for the sale of the house. The scenario will change if the spouse re-marries.
