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Should you sell or keep the home during divorce?

You and your spouse bought your home 10 years ago, right after you got married. You're still paying on the mortgage. You're also planning to get divorced. What should you do with the home, keep it or sell it?

You may not have an option. To keep it, you likely need one person to refinance it so that the mortgage is no longer in both of your names. This means that the person who wants to keep it has to qualify for that full mortgage all alone, on just one income. Not everyone can do so.

It's also more complicated than that. Your home is an asset. You've paid into it, together, for years. Your spouse has a right to some of that equity. For instance, maybe you paid $200,000 and you've now paid it down to $125,000. The house has also gone up in value to $225,000. You and your spouse have $100,000 to split up. The person who wants to keep the home may need to give the other person assets that are worth $50,000 or pay cash to buy him or her out. This is on top of getting the new mortgage.

In many ways, it's easier just to sell the home. That way, you both split the profits and you each get a nice $50,000 to start your new lives after marriage. You let someone else deal with the mortgage and you move on to find a place that is right for just you, whether that means renting or buying again.

Every case is different, so just make sure you consider your legal rights and obligations as you decide what you want to do.

Source: The Motley Fool, "How to Split These 7 Assets During a Divorce," Maurie Backman, accessed March 15, 2018

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