If you are not in a position to refinance the house or pay your spouse immediately, and there are not enough assets to offset your spouse’s interest in the home, you might consider giving your spouse a mortgage on the home, or securing your spouse’s interest in the home using an equitable interest notice.

If you have determined what the spouse will be paid for his or her interest in the home, and the terms of the agreement, your lawyer can prepare a mortgage document to secure the spouse’s interest in the home in the land records. That way, even if you die, your spouse’s interest is protected.

A negotiating point will be whether or not the mortgage secured against the home will bear interest. Sometimes, it makes financial sense to pay your spouse interest on the mortgage which can accumulate if he or she has to wait a long period of time for the money rather than having to immediately sell or refinance the house. Understand, however, that even if the house value falls, you will still owe the amount of money set forth in the mortgage.

For example, let’s say your home is worth $100,000.00 and there is an $80,000.00 mortgage on the home, leaving $20,000.00 in equity. You and your spouse have agreed to divide your assets 50/50 and you are going to keep the house, but you are unable to pay your spouse for his or her $10,000.00 interest in the home. You agree to execute a mortgage in favor of your spouse that you will pay in a lump sum in 10 years. This mortgage will be documented by your attorney, who will draft the proper papers, and record them on the land records.

The next question is whether this mortgage will bear interest for your spouse. Your spouse is waiting ten years to get $10,000.00. If she or he forced you to sell the house, he or she would get money immediately. Having to wait for the money may mean that your spouse is not able to buy another house or condominium immediately and has to make certain sacrifices. In such situations, having the mortgage pay interest is a desirable option.

If the market goes up, and in 10 years the $100,000 house is now worth $200,000, you are still obligated only to pay the $10,000 (plus interest, if negotiated) agreed upon in the original divorce agreement. Your spouse then gets $10,000 (plus interest, if negotiated) and you keep the $190,000 value (less any outstanding mortgages) of the house. If the value of the house skyrockets to $300,000.00, you would get to keep all of the extra equity by virtue of the house’s appreciation, and you would only owe your spouse $10,000.00. For more information on the financial aspects of divorce, see http://www.peace-talks.com/finformation.php. Also visit the Peace Talks resource center at

http://www.peace-talks.com/resources.php.

Excerpted from Your Divorce Advisor: A Lawyer and a Psychologist Guide You Through the Legal and Emotional Landscape of Divorce (Simon & Schuster/Fireside 2001). For more information: http://www.yourdivorceadvisor.com/.

For more information contact Peace Talks www.peace-talks.com 

(C) 2008  Peace Talks Mediation Services, Inc.

If you intend to sell your house, contact a neutral real estate agent who can give you trustworthy advice about preparing the property for a quick sale. Ask the realtor to tell you the minimum number of repairs and maintenance items needed to make the house easier to sell. Keep track of your expenses for the fix up, and keep track of who does all of the work. Don’t do anything fancy or major to the house unless it is absolutely necessary, or unless you and your spouse unequivocally agree that the improvement will be financially worthwhile. For example, painting the hallway is inexpensive and easy to do on your own, and if it will help your house sell faster, do it. If you and your spouse can cooperate in this effort, then do it together. If you can’t cooperate in doing this together, see if you can arrange to divide the tasks so that each of you can work on the house separately.

Even if your spouse won’t participate, such tasks still need to be accomplished. Perhaps you and your spouse can agree on hiring a painting company or maintenance service person to do the work for you, and splitting the cost. Even if you have to do all of the work yourself, do it. A speedy sale for a higher price benefits both of you. It is silly to let a home deteriorate, or let a sale slip through your hands by refusing to fix a roof, because your spouse won’t help pay. Keep a list of everything you do, so that if your case needs to be tried you can tell the judge about it later, but try to remain practical and pragmatic for now. Continue to work towards a solution rather than create an impasse, irrespective of your spouse’s behavior. Don’t lose sight of the benefit you will bring to yourself by putting up with some inconvenience in the short term. For some information on how to sell your house quickly, see http://www.ourfamilyplace.com/homeseller/prepare.html. Also see, “How to Sell Your House Quickly in Any Market, http://ezinearticles.com/?How-to-Sell-Your-House-Quickly-in-Any-Market!&id=1750273.

Excerpted from Your Divorce Advisor: A Lawyer and a Psychologist Guide You Through the Legal and Emotional Landscape of Divorce (Simon & Schuster/Fireside 2001). For more information: http://www.yourdivorceadvisor.com/.

For more information contact Peace Talks www.peace-talks.com 

(C) 2008  Peace Talks Mediation Services, Inc.

Reasons Not To Sell

1. stability for yourself and children
2. ability to refinance or buy out spouse
3. sufficient diversity of assets, i.e., in addition to house equity you also have kept some liquid assets for emergencies and/or sufficient retirement funds given your age and employment
4. ability to maintain house
5. ability to make mortgage payments
6. tax considerations (deductibility of mortgage payments and capital gains)

If You Decide Not to Sell: Joint Versus Sole Ownership

You and your spouse have two choices concerning the ownership of the house. You can continue to own the home jointly, or one of you can own it in one sole name. Although joint ownership may continue after a divorce, in practice this is sometimes inconvenient. It keeps one spouse from mortgaging or selling the property without the other spouse knowing, but it also can create friction between divorced spouses who may have different priorities with respect to the upkeep and maintenance of the home.

If one spouse retains ownership, that spouse is entitled to make all decisions concerning the property, free from any interference from the other spouse. While this may not seem like a benefit initially, five, ten or fifteen years later the benefit of having autonomy with respect to the home ownership becomes more tangible.

Ownership of the house is different, or can be different, than the responsibility for paying the mortgage. If both you and your spouse have signed the bank papers to be responsible for the mortgage, merely signing the title of the house over to one spouse does not relieve the other spouse of his or her responsibility to continue paying the mortgage. Refinancing the home mortgage in the sole name of the spouse keeping the house is the safest way to protect the spouse who won’t be occupying the home. If refinancing is impossible or impractical, your lawyer can help you build language into the agreement to protect the spouse who has relinquished his or her interest in the house from having to pay the mortgage. For some excellent resources on dividing the marital home in divorce, see http://www.womansdivorce.com/marital-home-and-divorce.html. Also see the Peace Talks resource center at http://www.peace-talks.com/resources.php.

Excerpted from Your Divorce Advisor: A Lawyer and a Psychologist Guide You Through the Legal and Emotional Landscape of Divorce (Simon & Schuster/Fireside 2001). For more information: http://www.yourdivorceadvisor.com/.

For more information contact Peace Talks www.peace-talks.com 

(C) 2008  Peace Talks Mediation Services, Inc.