For some Pennsylvania couples who are going through divorce, property division is simple and straightforward. When the couple rents a home, there’s no concern about dividing the property. The couple can find separate places to live once the lease runs out. However, when a couple owns a home together, there may be more of a challenge posed. In rare cases, a couple with the means to do so may retain joint ownership of the home and sell it when the market seems ideal. However, it’s commonplace for one member of the couple to buy out the other’s half of the home. The home can also be sold and the profits split.
The latter option is one that is commonly recommended by financial experts. When a spouse purchases another’s share in the home, one spouse is left with cash, and the other has the home. The valuation of a home can be difficult to determine, and that value is subject to depreciation as well, making it a relatively unstable asset. Commonly, though, at least one member of the couple will want to keep the home for various reasons.
If one person buys out the other’s share, it’s especially important to make sure that the mortgage properly reflects the ownership change. If the spouse who owns the home is good with payments, there may not be much to worry about. However, if payments are missed or late, there could be serious consequences for the spouse who is still named on the mortgage but is not technically responsible for payments. If possible, refinancing to reflect ownership changes is helpful.
For divorcing people, consulting with a lawyer who has worked with divorce and other family law issues can be helpful. A lawyer may be able to help divorcing people avoid pitfalls and other issues pertaining to divorce.
Source: Credit.com, “How to Divide Your House in a Divorce“, Scott Sheldon, July 09, 2014