Deciding what to do with the family home is one of the biggest issues facing most people who get divorced. However, there are questions that Michigan homeowners and others should ask before taking a home in a divorce. The first thing that a person needs to determine is how much equity is in the home. Equity is the amount the home is worth after subtracting a mortgage balance or any other loans associated with the property.
If an individual obtains a home after a divorce, he or she may owe the other spouse a portion of the equity. How the equity is split may depend on state law or the terms of any agreement reached before, during or after the marriage ends. In some cases, it will be necessary to refinance the mortgage so that only the current owner’s name is on the loan. This can be done at any time assuming that the new owner qualifies for a loan.
When refinancing a mortgage, it is important to be aware of current interest rates. Market conditions, as well as the method used to refinance the loan, determine what a lender charges for the right to borrow money. The type of loan used to refinance the home will also determine how much a person needs to borrow.
In a divorce, real estate may be divided between parties to the marriage. In some cases, the home or vacation property itself is awarded to an individual. In others, the equity within the property is divided in some manner between both individuals. An attorney might help a person better understand how property is divided and provide insight into how he or she can obtain a favorable property division settlement. A resolution may be reached in mediation or court.