When you divorce, a shared life is split in two. Not only is your relationship over, but you must also divide all your shared property. You must decide who gets the china, the cars and the couch.
Georgia is an equitable distribution state. All your marital property, which are most assets acquired during the marriage, is divided during property distribution. However, equitable distribution does not mean all your property will be divided exactly down the middle, but how the court deems fair. Your largest marital asset is likely your shared home. Here is what you need to know about dividing a home during a divorce.
Establishing the property value and equity
Before you make any decisions, determine the current value of your home. You could refer to property tax statements, but these may not reflect any improvements you completed on your home. It is probably wiser to get a home appraisal. Nerd Wallet even suggests that each spouse may want to get their own property appraisal.
Once you have an agreed upon value for your home, subtract your mortgage and any home equity loans from the value. That establishes your home’s equity. It is the home equity that will be divided between you and your soon-to-be ex. After you have established equity, you need to decide what you and your former partner want to do with the home. You have three primary options.
Sell the house and split the money
If neither one of you is particularly attached to home, this may be your best option. Assuming your home has a fair amount of equity, it will also give you a financial cushion to help you through the divorce process. Or maybe you just want a fresh start and want to leave your marital home behind.
One of you keeps the house
You may love your shared home and want to remain living there. Or your former partner may feel that way. If you want to keep the home, you must refinance the home and buy out your former spouse. Refinancing removes your ex from the mortgage. You will also need to get a quit claim deed to remove him or her from the property title. If your home has equity, you will also need to pay your former partner his or her share of the home’s equity. The refinance process will likely free up some cash, so you can pay your ex this way.
You both keep the house
Maybe your home has not gained much equity. Or perhaps you have children you do not want to uproot. There are a few reasons you may choose not to sell the marital home right away. However, this can complicate matters later, so make sure you both agree to this decision.
If want to keep your home after the divorce, it is important to make sure you can afford the mortgage on your own. Review all your monthly bills and make a realistic decision about what you can handle financially.
