What happens when one spouse wants the house?
Very often the house is the hottest topic in a divorce. Sometimes it is because the house has sentimental value, or it is the home for the children. If you are lucky, it may be because there is unrealized financial value. Whatever the reason there are several things to consider.
In Florida the term for dividing assets is called “equitable distribution.” “Equitable” suggests that assets are divided equally between the parties. That does not necessarily mean that the house is divided in half. It usually means that after all the assets are counted up the couple finds a way to distribute the financial value equally. So, if the house is important to you, maybe you can have the house.
Most families have a mortgage, so part of the house is encumbered by debt. If one party wants the house, usually the other party wants off the mortgage. Although you may be financially prepared to pay the mortgage, are you financially able to qualify for the mortgage? If you have an income, it is possible to qualify for a mortgage. In many cases, the mortgage is contingent upon both parties being wage earners.
Here are some hints for your own protection:
1. Before signing a settlement agreement that requires a spouse to refinance, check with a lender for pre-approval. At the very least, if there are obstacles you will be aware of them before signing an agreement.
2. Check the title transfers. This will provide valuable information that the home is not encumbered by liens. You must also have a properly executed quit claim deed to remove one spouse from the title. It is also recommended to purchase title insurance.
3. Get financial advice from a qualified financial planner. They will be able to provide advice on the broader picture of your financial circumstances, thus preparing you for the unforeseen expenses of homeownership.