Keeping the home after a divorce

On behalf of admin

In some Wisconsin divorces, estranged spouses might decide that one of them should keep the marital home. On the surface, this might seem like a straightforward decision, but both parties need to consider carefully multiple factors because owning the home and paying its mortgage could result in financial stress and hidden liabilities.

For a couple who owned a home jointly, one person could be removed from the title by completing a quitclaim deed. Although this ends one party’s ownership, that person might remain responsible for a home loan signed by both spouses during the marriage. A divorce decree and quitclaim deed do not end anyone’s obligation to a lender. This loan obligation could prevent the person who signed away the house from gaining approval for a new home loan.

Couples can resolve this issue by having the person who intends to keep the home obtain financing under a single name. Then the person could buy out the departing spouse’s share. This process removes the loan obligation upon the person who does not want the home.

Before someone seeks financing and buys out the other party, that person should treat the transaction like any home sale. A new appraisal, title search, pest inspection and home inspection will help establish the value and condition of the home. Armed with this information, a person might discover that the home needs costly repairs or that financing under a single income is not viable. People who are in this type of a situation could consult a family law attorney in order to see what approach should be taken to this aspect of the property division process.