If you're getting a divorce and you and your spouse own a house, there's a good chance that your home is one of the largest assets of the marriage, if not the largest asset – especially considering Southern California's housing prices!
If you're like most couples, you and your spouse own the home jointly and you're both on the mortgage. Mostly likely one of you will move out, and the other will stay in the house and pay the mortgage payments.
At some point in the future, the spouse who stays in the house will either sell or refinance the loan, but it's not uncommon for that to take some time. Couples can get very creative when it comes to making arrangements for the house in a divorce.
Whenever we're tempted to say we've seen every possible arrangement under the sun, along comes another couple who shows us yet another way to address the issue over the marital home.
Here are some things to consider:
- Capital gains
- Getting yourself disentangled
- How much is the house worth?
- Selling the house
- If you're going to stay
- If you're going to move out
- Is there equity in the home?
- Can you trade an asset for the home?
If You're Thinking About Staying
Can you afford the mortgage payments? Often, people who get divorced want the house so bad, but they don't realize how much it will cost to live after the divorce is finalized. Do yourself a favor and create a comprehensive budget before you agree to take the house.
If You're Thinking About Leaving
You want to think through how leaving will affect your credit. Even though you'll be moved out, your name will still be on the loan. If your spouse doesn't pay the mortgage, the lender can come after you.
Even if your spouse pays the mortgage on time, there could be another problem. Because you'll still owe a great deal of money on the house, you may not be able to buy another house or make a large purchase until you're off the house entirely.
If you continue owing interest on the house, don't forget about capital gains tax. Specifically, you could lose the rollover option since the home won't be your primary residence when you do decide to sell.
Talk to an Encino Divorce Lawyer
As you can see, there is a lot to consider when you're divorcing and you own a house. If you're searching for a divorce attorney, contact Cutter & Lax to speak to a lawyer who is board certified by the State Bar of California Board of Legal Specialization in family law.