Divorce creates a number of logistical questions for California couples. One of the most common questions issues involves what to do with the marital home. There are several options to consider.
Sell and split
Many divorce courts require a couple to sell their marital home and split the proceeds. In these situations, each partner receives 50% of what’s left after paying off the mortgage. This idea creates a clean break for both parties but also presents an issue if you are underwater on the mortgage. Also, if the couple has children, the process of uprooting those children can be a deterrent.
Buying out your ex
When a divorced couple decides that one spouse can stay in the home, they typically have to buy the other party out. While this allows your children to stay in the home, it often creates financial hardship for the spouse who gets to stay there.
Unlike selling the home, buying out your ex allows your children to have at least one home that they’re familiar with. However, this added cost may not be feasible for the spouse who remains in the home.
Co-owning the home
In the most amicable of divorces, both parties agree to defer the sale of the home. These agreements typically allow one party to stay in the marital home until certain events take place. These events include the graduation of the youngest child or the remaining spouse getting into a better financial position.
This plan also benefits the children since they spend at least half their time in a home they know. However, it also severely limits the moving prospects for at least one person while also lowering potential tax exclusions.
Every option has its own pros and cons to consider. The decision that you make regarding your marital home after a divorce will likely impact your credit score.