Michigan Divorce, should I keep the home?
As a Michigan Divorce attorney, a common question that I receive from our clients is should I keep the marital home? The answer that I usually provide is that I am not trying to be evasive but the answer to that question depends on numerous factors.
A house can mean a lot of different things to different people. For some, the home is a place to live that is made up a bunch of bricks and two-by-fours.
For others, it can also represent an important asset. You may love your house for its proximity to your work, your family, your children’s school, for stability or consistency for your children during a difficult time.
It is common in a Michigan divorce that one spouse wants to keep the house and buyout the other spouse’s equity share in the divorce settlement. The most common reasons to keep the marital home include but are not limited to the following: stability, keeping the children in the same school district, attachment to the house or neighborhood, and/or a perceived inability to afford comparable housing. Keeping the marital home reduces disruption for the children, avoiding the need for them to change schools and activities.
In a Michigan divorce, you have two main options with the marital home; sell it and split the proceeds or one party buys out the other parties equity interest.
Sell the marital home
The true value of any home is what someone will pay for it. Selling a home offers a clean break and closure for the divorcing couple. It also can provide each party with cash to cover divorce attorney fees, settle debts, and find new living situations.
Buy out the other party
In a buyout, the person who wants to keep the home pays the spouse half of the equity in the marital home and refinances the mortgage solely into their name.
One spouse may choose to keep the family home to maintain consistency for their children, or because it’s close to school or work. It’s also a good option if your local real estate market isn’t favorable, and you would take a loss if you sold.
Refinance the Home
If you decide to keep the house, and can agree on a buyout amount with your spouse, the next step is to deal with the present mortgage.
Generally, the mortgage will have to be refinanced into your name alone. That means you will have to qualify for the refinancing. We advise that if you want to keep the home that early on in the Michigan Divorce process you get pre approved for a mortgage.
The decision whether to keep or sell the house should be made as a part of the overall global Michigan divorce settlement. When making this decision, consider the assets and debt you expect to obtain in the divorce settlement, your anticipated income and any anticipated support you may receive (alimony or child support). We help our clients by having them fill out a budget of monthly expenses in order to visualize what they need to be able to afford the home.
Please keep in mind, that if you cannot comfortably afford the housing expenses, it might be best to consider selling the house and replacing it with something more affordable. Take your time with this decision and utilize all of the resources available to you: your lawyer, accountant, financial planner, and a trusted friend or family member who is knowledgeable in these matters.
When determining the division of property the Court takes into consideration the following:
Yeo v Yeo, 214 Mich App 598, 543 NW2d 62 (1995).
At Stelmock Law Firm P.C., our skilled Michigan Divorce attorneys handle all aspects of Divorce and family law cases. Your specific situation may be somewhat different from the norm; please call,734.927.9782, the Canton Michigan Divorce Lawyers and Family Law Attorneys at Stelmock Law Firm, PC to discuss your matter. We represent clients in the Metro Detroit area (Canton, Plymouth, Northville, Livonia, Westland, Ann Arbor, Novi) and throughout Wayne, Washtenaw, Oakland, and Livingston counties. The firm’s office is located at 8556 N. Canton Center Road, Canton, Michigan 48187.