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Decisions concerning the marital home following divorce

What happens to the marital home following a divorce?  Of all property division questions, this is perhaps the most vital one.  If both parties wish to sell the home, the property division aspects will generally go smoother.  Unfortunately, divorce is seldom a simple process.

While settlement papers may specifically hold one or other spouse accountable for payments upon a mortgage, the bank may have its own internal set of rules as to the handling of the mortgage.  For example, as one California couple was to discover the bank told a couple that a wife had to reapply for a different mortgage under her name only - that would come along with an additional fee.

Couples going through the process of a divorce need to plan carefully when it comes to the mortgage. Even if a decision is made to sell the property and split the proceeds equally, a couple must take taxes into consideration. And if the mortgage is underwater, the couple may either have to sell at a loss or have to figure out a way to get along until better offers on the home are possible.

When one party would like to stay in the home, there may be the need to refinance the home in the name of the spouse that will reside there. If the couple still is speaking to each other, it may in certain circumstances be a good idea to have both names on the loan. These options may not be available if a couple cannot agree.

Whatever the circumstances, couples will generally find it extremely useful to speak to an attorney regarding their property concerns. Attorneys can sometimes reduce the conflict and provide legal options that may work for both spouses.

Source: Reuters, "Splitsville?  How to divide property in a divorce," Geoff Williams, Oct. 7, 2013

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