Divorce and Your Marital Home
When people go through a divorce process, they tend to feel very anxious, depressed, and scared. It is common for people to experience anxiety pangs because of the uncertainty that surrounds the divorce process. In addition, people feel scared because they feel very lost while dealing with the legal issues. One of the most common concerns that people face around this time is where they will live after the divorce.
Your marital home may be a place that holds special memories; it may be your refuge from the big bad world – a place that allows you to relax and unwind. However, all that can change after your divorce. You may be emotionally attached to your martial home but you may or may not get to keep it post divorce. If you wish to keep your house, you will need to think about important issues such as financing options, your partner's wishes, and your children's living arrangements.
If you and your partner have a joint mortgage, you may have to apply for another mortgage in your name if you wish to keep the house. However, this may be possible only if you earn a sufficient amount to pay off a new mortgage in your name and you have built up enough equity in your joint arrangement.
You need to make the calculations after you have accounted for any equity that you may be entitled to. In most cases, the partner who is earning less is unable to stay in the house because either they are not able to meet the repayment of a new mortgage or they do not qualify for receiving a sole mortgage in the first place.
Calculating Your Equity
Many times, divorcing couples assume that since they both contributed the same amount to their monthly mortgage repayments, the receipts from the sale of the house will be split 50:50. However, that is not always the case.
If one of the partners has spent a considerable amount of money and time on home improvement purposes, this additional expenditure will be taken into account if the partners are unable to reach an amicable agreement. Therefore, at the time of division of equity, the partner who has contributed more towards the upkeep of house is likely to receive more from the marital pot.
If Children are Involved
The mechanics of division of a home's value change significantly if children are involved. There are times when one of the partners wants to buy out the other partner but does not think that he or she will be able to afford or qualify for a sole mortgage.
In such cases, the parent who wants to keep the home may offer to keep the children and agree to receive a lesser amount in child maintenance payments. However, for this arrangement to work, both the partners need to reach an agreement mutually and amicably.
What if You Do Not Reach an Agreement?
If you and your partner are unable to reach an agreement about the division of the house, you will need to go to court. In such cases, the court will get to decide the final outcome of the ownership and division of home.
It is important to remember that the court cannot transfer the mortgage liability from one partner to another without the lender's consent. The decision in such cases will be largely dependent on what the lender thinks about the situation.
Many times, the lender may be unwilling to transfer the mortgage if they believe that the new sole owner will not be able make the mortgage repayment or if there are existing arrears. Therefore, if the lender refuses to transfer the existing mortgage, the joint owners or the original sole owner will still have to keep making mortgage repayments.
It is best to seek advice from a competent solicitor if you and your partner are having a disagreement about what each of you is financially entitled to.
Once You Reach an Agreement
Once you and your partner agree on the settlement, it is extremely important to verify the deeds to your house. There are times when the deed contains a 'survivorship' clause which allows your spouse to claim a share of the house in the event of your death.
For that reason, you will need to make sure that once you transfer the property to your name, you remove your partner's name from the deed or else your partner could make a claim on your property in the future. Since matters concerning property can be complicated, it would be best to seek legal advice.