Couples in California who are getting a divorce and who own a home will have to decide how they should handle the home in the divorce. For divorcing spouses who want to purchase the home, there are some factors they should consider first.
It is important to know how much equity is in the home, or the net value amount of the home minus any encumbrances or liens. Typical valuation methods can include getting an appraisal conducted by a professional appraiser, obtaining a broker price opinion, having a comparative market analysis completed or using a property tax assessment. Once an accurate value has been obtained, mortgage balances, equity lines of credit and any other types of liens should be subtracted from that value.
Another issue to consider is how much the spouse purchasing the home would owe the other spouse. In community property states, the other spouse would be owed 50% of the home equity. In equitable distribution states, the property will be equitably and fairly divided, which may not always result in an even split.
Spouses who want to retain ownership of the home may want to refinance the home in just their name before the finalization of the divorce. This can be possible if they are able to qualify for the loan their own and do not have to use any child support or spousal support to boost their application. The main benefit of refinancing the home before the end of the divorce is that it removes the home as a source of conflict in the divorce.
A divorce attorney may work to obtain the divorce settlement terms that a client desires. Depending on the factors of a divorce, litigation or negotiation might be used to resolved disputes regarding the division of high-value marital property, such as the family home.
