5 Reasons to Keep the Home during a Divorce

Ending a marriage is not a pleasant experience, but there are several reasons to keep the home during a divorce. A clear understanding will make the transition easier for couples with or without children.

1. When Children Are Involved

If there are children involved and one spouse opts to stay in a familiar setting with the children after divorce, a divorce lien is something worth considering. When a divorce lien is employed, one person gets the property and writes a promissory note to the other spouse. The promissory note becomes a second mortgage in actuality, as the spouse who keeps the home promises to make a certain amount in payment to the other spouse in exchange for keeping ownership of the home. In most cases, the parent who has custody of the children will remain in the home. The children will not have to be uprooted from their familiar environment, there is no stress of finding a new home for the family and the cost of maintaining the residence is already known.

2. Keep the Equity

When the decision is made for one spouse to remain in the home after a divorce, that person keeps the equity. This means that the person who remains in the home is able to take out a home-equity loan or line of credit and use the money for whatever purpose she or he wants.

3. Increasing Home Value Benefit

The spouse who remains in the home reaps the benefit of the increasing value of the property. As long as he or she remains in the home, the value of the home can continue to rise, thus increasing the equity as well as the resale value should he or she choose to sell at a later time.

4. Ex-Spouse's Mortgage Responsibility

According to the Internal Revenue Service (Publication 936), "If a divorce or separation agreement requires you or your spouse or former spouse to pay home mortgage interest on a home owned by both of you, the payment of interest may be alimony.  See the discussion of Payments for jointly-owned home under Alimony in Publication 504, Divorced or Separated Individuals." This means that the person remaining in the home may request assistance with the monthly mortgage payments. If the judge offers a favorable ruling, this payment would be in the form of alimony.

5. Mortgage Payments Mean Better Credit History

The spouse who stays in the home after the divorce is solely responsible for the monthly mortgage payments--if alimony for assistance is not awarded--but the timely payments result in a better credit history. This is extremely helpful when taking out personal loans or applying for refinancing the property.

It is not uncommon for the nonresident spouse to execute a quitclaim deed, giving the ex-spouse title to the property. However, in many cases, the other spouse cannot qualify for a loan or is not willing to get a new mortgage, and the home remains co-owned. If you are considering divorce with one party remaining in the home, you should both be clear about each other's expectations. This helps ensure that keeping the home after divorce will be smooth and hassle-free.