How to Divide Property During A Divorce


One of the most significant financial decisions you have to make when getting a divorce is deciding what happens to your property. Even in the most amicable of divorces, figuring out how to deal with joint property can be complicated.

Here are some things you need to know about what you and your spouse can do to get the best results for your situation.

Dealing with a joint mortgage

When you and your spouse are dividing up your property, you also have to think about joint home loans. You can either choose to pay off your joint mortgage first as a couple then deal with the division of your property afterwards, or you can have only one person take on the loan for themselves. If you choose to do the latter, you’re going to have to speak with your mortgage lender. They’ll have to ensure that whoever will take on the mortgage is financially capable of doing so.

If the person that will take on the mortgage can’t afford to shoulder the costs on their own, they must apply for a guarantor mortgage. This type of mortgage involves legally assigning the ex-spouse or a close relative as the person who will be responsible for the mortgage payments in case the initial person assigned is unable to.

If either you and your partner are forced to go this route, make sure that the person assigned as guarantor is financially stable. You should also speak with your broker to learn about the benefits and drawbacks of this set-up before going through with it.

Selling your home

If you and your spouse are parting on good terms, then the easiest and most hassle-free option when it comes to dividing your property’s equity would be to sell your home. You can then use the money from the sale to cover extra sale-related expenditures, taxes, and any remaining mortgage payments, then you and your spouse will split whatever money is leftover.

One person will keep the house


When you’ve decided that only one person will be responsible for the house, that person will have to refinance the mortgage in order to become the sole owner of the property. This will allow you to remove the other person’s name from the mortgage so it isn’t a joint asset anymore, and it also liquidates the prior outstanding mortgage debt and instead puts a new loan in place of it. Whoever is the new owner of the property will have to quality for the new loan based on their sole income, so this option is only available to you and your spouse if either one of you qualify for it and can actually afford to shoulder the loan alone.

Both of you will keep the house

There may be instances where selling the home isn’t the best option. For example, if you or your ex can’t afford to live separately yet, are not capable of financially shouldering the cost of the mortgage, or owe more than what the property is worth. In this case, both of you can choose to remain as owners of the property, even if one of you decides to move out, until you’re both prepared to sell it.

Going through a divorce is difficult enough, but it’s even more difficult when you have to decide who keeps your family home. Go over these options and see which ones are right for you and your spouse.

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