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What happens to home equity when you divorce?

On Behalf of | Nov 9, 2018 | High-Asset Divorce |

While, when you are involved in a divorce, you may find that your emotions are all over the place, there are still certain matters you will have to work through before you can begin to rebuild and adjust to life on your own. For many couples, this means determining how to divide shared assets between you, and one of the more substantial assets many divorcing couples share is a home.

So, what sorts of options do you have when it comes to dividing home equity amid divorce?

Option 1: Sell the home and split the profits

Many people facing circumstances similar to yours decide that the easiest, cleanest way to make a break from one another after divorce is to sell the shared home and divide the proceeds from the sale between both parties. That way, neither party in the marriage has to live in a once-shared home that may conjure up happy – or not-so-happy – memories of times gone by.

Option 2: Have one party buy out the other

In some cases, one party within a divorcing couple may decide he or she wants to stay in the once-shared family home, either because he or she does not want to uproot children, or because it is easier and more affordable to do so. In such situations, it often makes the most sense to have the party remaining in the home refinance the mortgage to exclude the former spouse.

Option 3: Share the house and take turns living in it

Some divorcing couples take things a step further and, when finances allow, choose to take turns living in the family home alongside any shared children while the other party lives elsewhere. This can prove to be quite an expense, however, so this is typically a less common option for most divorcing couples.

Whatever method you choose to use to divide home equity when you divorce, consider having you and your ex each secure your own home appraisal. Doing so has the potential to streamline the process and prevent future disputes.


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