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When going through a divorce, the family home is often the most valuable asset a couple has. Exactly how much equity each person has in the property is not always straightforward, so it is important to seek expert advice.
In this article, we cover the following key questions and concerns that people often have in relation to home equity and divorce:
- How is a house split in divorce?
- How is home equity determined in divorce?
- How do you decide on splitting equity in divorce?
- How do you value your home in divorce?
- What happens to the mortgage in divorce?
- Can you sell your home during divorce?
- What happens during divorce if the house is in your name only?
- What happens in divorce if your home is in your spouse’s name only?
- What happens if you buy a house during a divorce?
The advice in this article is intended for general information purposes about home equity in divorce only and should not be taken as legal advice.
To arrange a fixed fee initial consultation with a member of our team, please fill in our simple enquiry form or call 020 8301 7777.
How is a house split in divorce?
People often assume that their assets will be split 50:50 in divorce, but this is not necessarily the case. The family home will usually need to be considered in any divorce settlement, but exactly how it is split will depend on various factors, including , what contribution each person has made to the property and what other assets there are to divide.
A key point to understand in relation to how to divide equity in divorce is that divorce financial settlements should ultimately be guided by the reasonable needs of each spouse and any children. This is what a court would look at when deciding the division of finances, including splitting the house in divorce.
Something else to consider is that, if one spouse bought the property before the marriage and the other is not considered to have made a contribution to it (e.g. paying the mortgage), then the non-owning spouse will not necessarily be entitled to a share of the equity if their name is not on the title deeds.
How is home equity determined in divorce?
If both spouses’ names are on the title deeds and both have contributed equally to the deposit and mortgage, then it may be that a straight 50:50 split of the equity will make sense.
However, things can get more complicated if the property is only in one person’s name, the deposit and mortgage payments were not split equally or where one or both spouses have contributed to the property in other ways e.g. by paying for or carrying out renovations.
If the property is only in one spouse’s name, the other may still have a claim to some of the equity if they can show that they contributed to the property e.g. by helping with the mortgage. If the property is in both spouses’ names, then their individual contributions can be taken into account when determining their respective shares of the equity.
Determining the value of someone’s contribution to a property is not always straightforward. They would need to be able to show evidence of any contribution they made to mortgage payment, home renovations etc. If they personally carried out works that improved the value of the property, the value of this would also need to be determined.
Ultimately, it is always important to speak to an experienced solicitor about how to split equity in divorce as they can help you to understand your rights to the equity in your home and what evidence you would need to support your case.
How do you decide on splitting equity in divorce?
The division of home equity can normally be agreed voluntarily between spouses as part of reaching a settlement. This can be achieved through direct negotiation or through methods such as mediation.
If you cannot agree the division of equity amicably, then you may need to rely on court proceedings. In such cases, it is important to have strong evidence to support your position.
How do you value your home in divorce?
The standard approach is to hire a Royal Institution of Chartered Surveyors (RICS) registered valuer to provide an accurate, independent valuation of the property.
What happens to the mortgage in divorce?
If you have a mortgage with your spouse, then your options depend on whether one of you wishes to keep the family home or not.
If neither of you wants to stay in the home, you can simply sell it, repay the mortgage and any remaining money can be divided as part of your settlement.
If one of you wants to keep the family home, they would need to get the mortgage transferred into their sole name or apply for a new mortgage to replace the existing one. In either case, the mortgage provider would need to carry out an affordability assessment to make sure that the spouse keeping the home could afford the mortgage payments.
Can you sell your home during divorce?
Yes, if you wish to, you can sell your home during your divorce. The proceeds from the sale (after repaying any outstanding mortgage) would then be considered as part of your assets for the purposes of dividing your finances.
What happens during divorce if the house is in your name only?
If the house is in your sole name, then what happens will depend on whether it was bought before or during your marriage and if your spouse has made any contribution to the property. This is something on which our solicitors can advise.
What happens in divorce if your home is in your spouse’s name only?
As above, if the house is solely in your spouse’s name, your rights would depend on when they bought the property and whether you made any contribution to it (financial or otherwise).
What happens if you buy a house during a divorce?
If you buy a house during a divorce, then it may need to be considered as part of your divorce settlement. This can get complicated if, for example, you were buying the property with money gifted by a third party such as a parent, so it is important to get expert advice before buying a home during divorce.
Contact our divorce solicitors in Bexleyheath, Dartford and Orpington
To speak to one of our divorce solicitors or to arrange a fixed fee initial consultation, please fill in our simple enquiry form or call 020 8301 7777.