When you and your spouse in California decide to divorce, one of the biggest questions involves what you should do with your family home. Most couples buy a home after they marry, but that property frequently ends up as the first item on the chopping block after a split. Here is what you can do.
Options for your home after divorce
Couples going through divorce have several common scenarios to consider regarding their family home. These are:
- Selling the property and split the profits
- Jointly maintaining the property and use it as an investment
- Relinquishing the mortgage to one spouse
If you decide on the last option, the spouse who stays in the home must determine if they can afford it, and they will likely have to requalify for the mortgage. You must also retitle the property when one partner remains in the home. This move requires a quitclaim deed from the partner who relinquishes their name on the title.
Other financial issues to consider
Refinancing a mortgage or assuming the original mortgage is another point to consider. Many mortgages established after 2008 do not allow mortgage assumptions, so you may have to refinance. Home equity is another consideration if one of the spouses decides to stay in the home.
Property division is a major concern
How you divide your property is a significant concern after child custody and parenting. California law requires you to split the value of your family home equally if you acquired the property during your marriage. You must undergo property characterization before dividing the home’s worth, which essentially indicates that it’s community property.
Determining the value of your community property can be challenging, especially if you have accumulated a significant number of assets during your marriage. Consider working with professionals, such as certified divorce financial analysts, to determine the worth of assets that you and your spouse must split. Although this step will cost money, it will ultimately help determine an equitable divorce settlement, as these professionals have experience determining the best way marital assets should be divided.