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Buying the family home after a marriage ends

Because a home is often the most significant asset acquired during a marriage for California couples, it's also a common source of contention when a marriage ends. Any spouse wishing to keep the marital home is typically advised to find out whether or not sole ownership is financially feasible. There are several steps that can be taken to make this determination.

The first one is for the home-buying spouse to determine how much equity they have in the family home by finding out how much it's worth. This information can be provided by a neutral, third-party appraiser. A faster and less expensive option is a broker price opinion (BPO) executed by a real-estate agent, appraiser, or broker. A comparative market analysis provides home value details based on prices of comparable homes in the area. Property tax assessments tend to be less reliable. Equity value is then determined by subtracting related debts, like an outstanding mortgage balance.

What the other spouse is owned for the home will be determined by how community property is divided. In California, the split is 50/50, which means the other spouse gets half of the home's equity. However, deductions from this value may be made if separate funds were used for improvements or investments like the initial down payment. The size of the mortgage the home-buying spouse needs depends on factors such as whether or not other assets are being used to complete the buyout.

As long as the home-purchasing spouse isn't using spousal or child support to qualify, they could refinance the home in their own name. A divorce attorney may encourage a spouse to take this step as soon as possible to help make settlement negotiations more productive by taking marital home issues off the table. After a buyout is complete, the other spouse receives their proceeds directly through escrow.

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