1. One of the spouses “buys out” the other
The spouse who is buying out the other, will pay a lump sum and incorporate any equity that has been accumulated over the marriage. The spouse who is taking over the home will need to apply for a refinance in only their name and go through the mortgage pre-approval process.
2. Sell the home
It is possible that, neither spouse wants to keep the home or that neither spouse can afford to keep the home. If the divorcing couple decides to sell the marital home, the proceeds or shortages that result in the sale are generally split.
3. The couple can continue to “co-own” the home
This option is often chosen by couples who have children whom they do not want to uproot from their homes. The success of post-divorce co-ownership depends on several factors, including:
•A understanding that the full amount of the mortgage will appear on both spouses’ credit reports.
•The couple is essentially entering into a business relationship.
•The financial future will continue to be affected by the decisions of the other spouse who is directly involved in the property, for as long as they co-own the home.
