For many people, the family home is their most significant asset. When a marriage ends, one of the most important questions is what happens to the marital home? How should it be divided? Is it possible for one spouse to continue living in it? Generally, there are two options: sell the home and divide the proceeds, or one person remain in the home and buy out the other spouse’s financial interest.

Selling the Home

If the couple wishes to sell the home, they must agree on a sale price. In most cases, it makes sense to work with a real estate agent. An agent provides a neutral perspective on the home’s value. The agent can also make suggestions about required repairs and a marketing plan for selling the property.

In some cases, it’s also a good idea for the parties to agree in advance on a timeline for reducing the asking price if the house fails to sell within a specific time period. This can help the couple avoid conflicts down the road.

Keeping the Home

In some situations, selling the home is impossible or undesirable. For example, a weak economy might mean the parties are unlikely to sell their home at a price that makes financial sense. They may also lack enough equity in the home to make a sale possible.

In other cases, people are reluctant to sell the family home because they don’t want to disrupt their children’s lives. Keeping the marital home in the family means the children get to remain in a school and neighbourhood with which they’re familiar.

There are a few steps that need to happen before one spouse can remain in the family home. First, it’s important for the spouse who wishes to keep the home to determine if he or she can afford it on a single income. He or she must also be able to generate enough money to buy out the other person’s interest in the property – something that can sometimes be accomplished through refinancing. The spouse remaining in the home must also work with the mortgage lender to make sure the lender will issue a mortgage solely in that spouse’s name and that the spouse leaving the home is cleared from both the mortgage and the home’s title.

Although it’s possible for both spouses to stay on the loan, this is not typically recommended, as it makes the non-resident spouse responsible for the mortgage should the resident spouse fail to make the payments. It can also prevent the non-resident spouse from obtaining his or her own mortgage on a new property.