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Options for Dividing the Family Home in Divorce

After years of living in the same home and growing accustomed to your surroundings within the community, the thought of parting with a family home may seem daunting. For many families, the family home is the most valuable asset, and it is an asset that is not easy to simply cut in half.  While you might be perfectly content with staying in the home, some circumstances in life may leave you facing a difficult decision.

Should you and your spouse choose to take separate paths, you might have concerns over how best to handle the family home. Although this asset may hold a lot of value beyond purely financial, pursuing ownership of the home is one option among many others options that need to be considered in the context of a divorce.

The family home in divorce

Since the family home could consist of a considerable portion of your wealth, it will likely play a significant role in what comes next. Prior to deciding on a path, it might be in your best interests to address certain factors, some of which may include:

  • Net Equity: Net equity refers to the amount you would expect to receive after you sell the real estate, and all the closing cost fees are paid, including the mortgage, taxes, other liens, realtor fees and other closing costs (which generally run about 8% of the selling price).  Awareness of the net equity of your home could influence the decisions you make, and while obtaining the true value of your home can be a complex process, it could also prove a vital step in forming a strategy for negotiations.
  • Costs of ownership: In community property states, such as Texas, the home's equity is part of the overall division of assets.  Most of the time, divorcing parties can expect close to a 50/50 division of their community proeprty estate.  The net equity will be factored in as part of the overall division.  Of course, keeping the home post-divorce will have other costs associated with it as well, such as property taxes and insurance, and maintenance and repairs. 
  • Buyout agreement: In addition to knowing the costs of seeking ownership, it may also be helpful to understand how a buyout agreement might impact mortgage interest rates.  If you obtained a highly competitive interest rate when you obtained the original mortgage on your home, you may not want to have to refinance the mortgage if you plan to keep the residence. 
  • Mortgage concerns: Prior to deciding on a path, it may also be in your best interests to understand the steps involved with refinancing or seeking a new mortgage.  It can help to speak with a mortgage broker early on to have a better understanding of your options for refinancing the existing residence, or buying a new property.

The outcome of a divorce will inherently impact your finances, even if only temporarily. As such, making informed decisions about how to handle big ticket items such as the family home could prove vital to safeguarding your financial future.

Advice early on

Deciding how best to prepare to protect your future during the end of a marriage can be a stressful and intimidating endeavor. Fortunately, you don't have to go through this alone, and it will be in your best interests to seek advice from someone with experience in such matters early in the process. By seeking guidance, you could find yourself in a much better position to seek the most favorable outcome achievable during legal proceedings and shift your focus toward opening a new chapter in life.

If you are considering divorce, and want to better understand your options regarding your family home, we would love to talk with you.  Call (214)420-0100 to schedule an appointment to speak with an experienced family law attorney.

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Hargrave Family Law Jennifer S. Hargrave, P.C.

Hargrave Family Law
4201 Spring Valley Rd.
Suite 1210
Dallas, TX 75244

Phone: 214-420-0100
Fax: 214-420-0101
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