In many divorces, the primary asset is the house. There are three typical ways to divide the house.
First, the couple could sell the house and split the proceeds. This may be the only viable option if neither spouse can afford a mortgage payment on their own.
Second, when dividing the house one spouse to stay in the home and buy the other spouse out. If the couple decides to split the house this way, then they may want to have an appraiser value the house. The spouse who remains in the home might need to refinance the home to remove the other spouse from the mortgage. This means that they would have to qualify for a new mortgage, which may be tricky if the loan was based on two incomes. The spouse remaining in the home may be able to negotiate for a lower buyout as well.
Third, the couple may keep the house and both continue to live there, take turns living there or rent the house out. This might be the only financially realistic option if the couple is underwater on their mortgage. Some couples stay in a home together for the sake of their children. They should create an agreement that clearly outlines who is responsible for the costs of homeownership, taxes, upkeep, and other expenses. Finally, there should be a clear, defined plan to sell the house once the kids move out.
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