Effective Legal Counsel From A Pender County Native

Common methods of dividing home equity in a divorce

On Behalf of | Jul 21, 2021 | Property Division |

When your North Carolina marriage ends, you must figure out how to separate your life from your former partner’s. Part of this process involves divvying up any assets or debts that you share. You may find that the equity you have in your shared home is among your most valuable assets, so figuring out how to divide it may be among your main concerns.

According to NerdWallet, many people who divorce their one-time partners choose to divide equity they have in their homes in one of the following ways.

By selling the home and splitting the profits in half

Placing your home on the market and then splitting any proceeds you make on the sale is arguably the easiest and smoothest way to split home equity. It may also give you an opportunity to get enough money together to buy your own house or make a security deposit on a rental.

By refinancing the mortgage to exclude one of you

If you want to keep the home and your ex wants to vacate it, or if things are the other way around, the party wanting to keep the house might want to refinance the mortgage to pay off and exclude the other party. However, if you are the one wanting to keep the house, your ability to do so depends on whether you are able to qualify for a new loan on your own.

Sometimes, market conditions or other factors make it a bad time to sell your home. In this scenario, you may want to consider a “nesting” arrangement or something similar that has you take turns living in the home you once shared until circumstances improve.