If you and your ex-partner own a home for sale, it can be checked and calculated whether one of you can stay in the home after the divorce. Your joint home has a certain financial value and belongs to both of you. In the event of a divorce, this value is fifty percent of the other ex-partner, this can be for the equity as well as for the residual debt. In this article we will take a closer look at the division of the home after the divorce.
Joint owner of a home for sale
Applying for a divorce involves a lot of arrangements, including the division of your joint home. As soon as you have made good agreements about joint assets and debts, these will be recorded in the divorce agreement. There are various scenarios and options for the house.
The house could be sold during the divorce, and both parties will each receive their own share of the equity or residual debt. Or one of the ex-partners continues to live in the house and buys out the other. If you cannot resolve it together, it is advisable to engage a mediator. This independent and professional mediator can help you both to resolve the matter together.
Buying out the ex-partner
The ex-partner who continues to live in the house, pays the other a compensation for his/her part of the house. The compensation is calculated on the basis of the home value minus the outstanding mortgage. The amount that remains is for half of both ex-partners. An appraisal in the event of a divorce can be an important step if you cannot agree on the value of the home in mutual consultation. With an equity value on the home, there can be quite a few costs involved in buying out.
By taking out a new mortgage on the house, you can co-finance the buyout sum of your ex-partner. However, you must have sufficient income for this. A mortgage advisor can make a calculation for you based on your income and any debts. This calculation shows whether you can bear the entire mortgage yourself. If this is not feasible, the house will have to be sold.
Buy out of ex-partner financially feasible: perform administrator test
The National Mortgage Guarantee (NHG) has developed a test to check whether the mortgage can be paid. . The test does not look at the maximum amount that can be borrowed, but whether the monthly costs can be borne by the ex-partner who continues to live in the home. When the monthly costs are bearable, you can borrow extra money from the NHG guarantee fund to buy out the other ex-partner.
Interested or research your possibilities?
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