There are many things typically up for discussion between a couple that has decided to divorce. One of those issues is property division, and in some cases, one person may wish to keep the home. But how likely is this in regard to a changing financial landscape? In Virginia, there are a few options couples have, so it’s important to have some insight into the laws that govern property division.
Dividing the marital property typically includes home equity
With the housing market in Virginia continuing to grow and housing prices expected to continue on an upward trend, neither spouse may want to shop for a rental or purchase another home. Staying in the present home may seem like a better option. But keeping the home may not be as straightforward as it may seem. First, one spouse typically won’t be able to solely retain the equity value of the marital home. The equity will likely have to be shared between both spouses, and to do that, the marital home often has to be refinanced.
Can one person qualify for a mortgage?
It’s often easier for a couple to qualify for a mortgage on a single-family home than it is for one person. Even if one person’s income qualifies him or her for a mortgage, the interest rate might be higher — or the payment may be higher — after withdrawing the equity in the home for the other spouse’s share of the home value. That’s not to say it can’t be done, but costs to maintain the home also have to be taken into consideration as well as taxes and insurance.
Some people who are divorcing find that downsizing to a smaller property is a better decision for both financial and practical reasons. The division of marital assets can be a complicated issue in Virginia, and it can have significant long-term effects on a divorcing spouse’s financial future. A thorough review of one’s unique situation, including his or her financial circumstances, can help determine whether trying to keep the marital home would be a prudent move when preparing for or going through a divorce.