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What parting spouses need to know about the family home

On Behalf of | May 14, 2019 | Divorce |

For many divorcing couples in Kentucky, the family home is the biggest asset that needs to be split. If there is a desire for one spouse to become the sole owner of the home, it can help for them to approach the process as if they were purchasing an entirely new property. A good place to start for a soon-to-be ex looking to claim the marital home is to determine how much equity they have in it.

While it’s possible to use a property tax assessment to determine the value of the marital house, such information may not be current. A more reliable option is a full appraisal performed by an impartial appraiser. Similar details can be provided by a broker price opinion or a comparative market analysis. The accurate value of the home will then be determined by subtracting any debt related to the property.

What a spouse has to pay their ex to buy them out will depend on how the marital property is divided. Kentucky is an equitable distribution state, which means splits aren’t always 50/50 since other factors are also considered. In some situations, adjustments to the home’s value will be made if either party used separate funds to make payments or improvements. With the mortgage, a common recommendation is for a spouse to determine what they qualify for first and subtract any other assets they may be able to put toward the buyout.

A home-buying spouse may be able to refinance before a marriage officially ends. This is referred to as a cash-out refinance. Taking this step could also allow a divorce lawyer to negotiate a fair settlement without the added stress of having to work out issues pertaining to the family home. However, a rate-and-term refinance usually offers better terms because it’s done in accordance with the settlement agreement.

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