Asset division is often a point of contention in many Maryland divorces, and the family home may be among the most valuable assets you and your spouse/estranged spouse currently share. For this reason, figuring out what to do with the equity you have in the house is an important step in your split.
When reaching agreements, often couples choose to handle their home equity in one of the following ways when they separate.
By selling the home and splitting the profits
When navigating your divorce or separation, consider selling the home and then splitting what you make on the sale right down the middle. This may prove especially worthwhile if you need some extra money to put toward finding a new place to live on your own.
By having one party refinance the mortgage
If just you, or just your former partner, wants to keep the family home, whoever does should find out whether he/she/they qualifies for a new loan without the other. If so, that party should refinance the mortgage into a new loan with only one name on it, which should free up cash to buy out the other party’s share of the equity.
By waiting for the time being
Though rare, some former couples choose to wait before figuring out what to do with the home, choosing instead to either live in it together or taking turns living in it. This situation may serve you well if you have older children who may soon move out, or if the housing market is such that you would lose money by selling the house.
Regardless of what method you choose for dividing home equity, the first step in the process typically involves securing one or more appraisal.