In many families, the house is one of the two largest assets, the retirement accounts being the other. The house can be both an emotional issue and a financial issue.
There are basically four ways to deal with the house.
1. Sell the house during the divorce and split the net proceeds.
2. One person keeps the house, buying out the other. The person getting the house either keeps the house or sells it.
3. Both parties keep the house, but only one lives in the house. At the time of sale, both participate in the net proceeds.
The legal issues over transferring the title to one person are state specific. If a couple cannot simply re-title the house, they may need to refinance the house so as to get one party “off the loan”. Refinancing may be preferable when they want to have a lower monthly payment. The couple may wish to refinance the house prior to the divorce if the lower earning spouse is going to keep the house and cannot qualify for the mortgage on their own.