When your Washington marriage comes to an end and you and your spouse own a home together, you need to figure out what to do with it. Depending on the length of your marriage, among other variables, you may have amassed a considerable amount of equity in your home. So, it may be one of the most valuable assets you and your one-time partner currently share.
When it comes to dividing home equity, you have several options available to you. However, most people navigating divorces choose to divide their home’s value in one of three ways.
1. By selling the home and sharing the proceeds
Unless you are facing a particularly poor housing market, you may find that selling the home and splitting what you make on it is an easy, clean way to divide equity. Selling the family home may also free up money you need to put down a deposit or down payment somewhere else.
2. By refinancing the mortgage
If one of you wants to stay in your once-shared home and the other prefers to vacate it, the party wanting to stay should try to qualify for a new mortgage under his or her name only. Refinancing the mortgage allows the party staying to pay off outstanding mortgage debt and take out an entirely new loan.
3. By hanging on to home for the time being
In rare cases, it may suit your needs to have both of you stay in the home, or alternate staying in the home. This may work well if you have children you do not want to uproot or if you feel you could make more money by waiting for market conditions to improve.
Before taking any of these steps, secure one or more appraisals to determine your home’s worth.