Simple tips for property division during your Divorce - Part 2

Dividing assets during your divorce can be about the bottom line. But what happens when you own a home together, how does this get divided fairly? Once the property is listed and valued, it is easier to take the next step which is the actual division.

How to get started

You can start in one of two ways. Some people will list the easiest division items first such as who gets which autos and who gets which bank accounts.  I prefer to start by trying to tackle the hardest items first. This is usually the house.

Unlike back accounts and retirement accounts that can be easily divided in half, it can be more difficult to divide a house in half. There are really only three choices available to you:

1. You can both decide to sell the home and divide the cash obtained equally. This is least chosen option because most often, one or both would like to keep the home after the divorce. 

2. One can buy out the other’s half interest in the home either by refinancing and obtaining some funds from the value or by trading off other assets for the house (I will keep the entire house, you keep more of the retirement assets). 

3. Or, they can both continue to jointly own the home as they now do with one of them living in the home and then there must be an agreement about when and how to unhook from the home in the future.

All three of the above choices can be used in mediation and it is up to the two of you and your own personal situation as to which will work best for you. No one other than the two of you can really tell you what will work best for you and the decision is based upon a whole host of items, but the most important item for all couples is to find a way to create decent, adequate residences for each after the divorce.  This task is made easier by a referral to a competent mortgage banker.

How mediation helps

It is still often the case that banks will say to a person in the midst of divorce, “Come back and see us when the ink is dry on your final papers from the court.”  This could be six months to year in the case of a litigated divorce. However, in mediation, when people stay focused on the task of obtaining two adequate homes for each, the planning and in many cases, qualifying for a mortgage and then purchase,  can begin immediately at the first mediation session. 

We like to refer to only a mortgage banker we have worked with in the past who is knowledgeable about qualifying people in the midst of divorce negotiations. That person is Todd Nowek, of Bell Mortgage  and when he understands the financial situation and the direction of the negotiations, he can be helpful in obtaining that second house for those couples who wish to create similar housing for each after the divorce.