When a married couple decides to divorce, there is often a difficult choice on whether or not to sell their home. A variety of factors will determine what the right course of action. These include the amount of equity in the home, each person's income and credit, and even market conditions. Retaining ownership can have a wide range of long-term consequences, so it's important to carefully consider this decision.
When a property is held in both spouses names, it is common for one of the parties to sign a quit claim deed and simply be done with the matter. A quitclaim removes the spouse from the deed of the property, but it does not absolve them of responsibility for paying off the loan. This can become a problem in the future if the spouse who still owns the home has trouble paying the mortgage.
To avoid this problem, it's a smart idea for the spouse who gets the house to take out a new loan. By treating the transaction as if it were between strangers, both parties would be able to split costs equally and prevent any feelings of unfairness. Before proceeding with the transaction, the property should get a title search, inspection, appraisal, and any necessary repairs.
When considering property division during a divorce, it's important for each spouse to protect their own rights and financial interests with help from an attorney. In many cases, counsel can help their clients come to an agreement that doesn't involve going to court, but particularly difficult disputes may involve a trial. Homes are often the largest asset married couples own, so resolving this issue is one of the top priorities during divorce.