During a divorce process, you need to make many life-changing decisions. Figuring out where you will live is one of the first issues you must address.
There are many elements and uncertainties involved with determining your housing options.
Do you own your current house?
A mortgage is often the largest investment people make, making it a significant issue during a divorce. If you own your home, you must assess the financial and practical specifics of your situation:
- Do you or your spouse wish to stay living in the house?
- Is selling the property and dividing the proceeds an option?
- Do you want to remain joint owners of the mortgage and defer the sale of the home?
- Did you or your spouse own the property before the marriage?
What scenarios can you afford to consider?
If you decide to stay in the home, you will likely need to refinance the property or exchange other marital assets for the debt amount. Even if the court awards you the house in your divorce settlement, lenders will not release your partner from the mortgage contract. Depending on the amount of equity each of you gets, you may not qualify or have the ability to pay a new mortgage on your existing home.
The division of your other assets and debts may allow you to buy out your spouse’s interest in the home, leaving you with sole possession of the property. Or, you can sell the house together and split the profits equitably.
Some couples may choose to co-own the house so that children can remain living in the family home. In this situation, the court agrees to a temporary postponement of the sale.
Understanding the laws governing the distribution of assets in California is crucial for devising a settlement plan that you can afford.