During a divorce, there is typically one asset that most parents worry about more than others: the family home.
There are several reasons a spouse may want to keep the family home after a divorce, from the financial investment to the emotional attachment. Many parents might also want to keep the home to maintain stability in their child’s life during the divorce.
Here are a few things that spouses should know if they want to try and keep the house in their divorce.
The family home is subject to property division
Just like any other property in a North Carolina divorce, the family home is subject to equitable distribution.
That generally leaves divorcing spouses with a few options, including:
- Determining which spouse will keep the home. The spouse who keeps the home would buy out the other spouse by paying them their portion of the equity;
- Deferring the sale of the house, and the division of the proceeds, until the children grow up and leave the home; or
- Selling the home and dividing the proceeds of the sale equitably.
The third option has been much more common in the past. This is because buying out a spouse and keeping the home can be rather expensive. After all, it also involves refinancing the mortgage in only one spouse’s name and covering all the utilities.
In some cases, spousal support can help to cover these costs, but it can still be financially stressful for one spouse to keep the house after divorce.
Keeping the house has become more affordable
However, according to a recent report in Kiplinger’s Finance, more spouses can afford to keep the home after divorce nowadays.
This is mostly due to recent trends in the real estate market nationwide, leading to:
- Lower house prices; and
- Lower mortgage interest rates.
It is still critical for spouses to calculate the value of the home and ensure that it is within their post-divorce budget to continue living there. However, more parents might be able to remain in their homes after divorce due to this shift.