What happens to home equity when you divorce?

| Dec 3, 2020 | Family Law |

When you own a North Carolina home with your spouse and your marriage comes to an end, you must figure out how to split any equity you may have amassed in the property during the marriage. The first step in the process involves getting an idea of your home’s value, and you may want to do so by securing one or more appraisals. 

According to NerdWallet, getting two appraisals enhances the chances of you getting an accurate picture of your home’s true value. Once you have a clear picture of your home’s market value, you should be able to decide what you want to do with any equity you have in it. Most people choose to divide home equity in one of three ways. 

By having one party refinance the mortgage to exclude the other

Want to stay in your once-shared home while your former spouse wants to vacate it, or vice-versa? Whoever wants to keep the house should consider refinancing the mortgage so that it is under just one name. 

By selling the home and splitting the profits

You may find that putting your home on the market and splitting any proceeds you make on the sale between you gives you both a chance to get a fresh start. Doing so may help you both leave what might be bad memories behind. It may, too, give you what you need to make a security deposit on a rental or a down payment on a home of your own. 

By establishing a nesting arrangement

If finances allow, you may want to wait for the real estate market to improve by taking turns living in the home you once shared. Known as nesting, this type of arrangement may meet your needs if you want to minimize the changes your children experience due to your divorce.