When couples divorce, what to do with the family home is one of the top considerations. While some couples prefer to sell the home and split the profit so they can start anew, one spouse may wish to keep the home. Typically this involves transferring the title and refinancing the mortgage in one spouse’s name, but when refinancing is not an option, there are other options to explore.
Selling to a Spouse Using an Installment Loan
If you want to keep the family home in a divorce but cannot afford to purchase it from your spouse outright and are unable to refinance it, your spouse may be willing to let you purchase the home in exchange for a secured installment note with payments over a fixed period. This provides your spouse some measure of security if you default on the loan, which may make him or her more inclined to work with you to keep the home.
Selling the Non Resident Spouses’s Interest in the Home to a Third Party
If you want to keep the family home but are unable to qualify for a refinance and your spouse wants a clean break, untethered by joint ownership or a installment loan agreements, another option is to ask a relative or friend to purchase your spouse’s interest in the home thus making you co-owners with that relative or friend. You may pay rent or set up an installment agreement with the relative or sell the home and split the profits down the road. It is important to work with an attorney to iron out the rights and responsibilities the co-owners would have so you both know what to expect moving forward.
Exchange the House for Assets or Release of Alimony
Often, where there is a will, there is a way when it comes to negotiating a divorce settlement agreement. If you want to keep the family home, but are coming up short, exchanging other assets such as retirement accounts to satisfy what is owed your spouse for their interest and equity in a home may be an option. Or, for a spouse entitled to a sizable chunk of alimony, exchanging that for the house may also work. You will want to work with an experienced divorce attorney to explore what arrangements are available and thoroughly look at the tax consequences of any option that you choose.
Borrow from Your Retirement Account to Buyout a Spouse’s Interest in the Home
Many employees have an option to borrow from their retirement accounts as long as they pay it back within a defined period. This may be an option to explore if you come up short on a refinance when trying to keep your home in a divorce. Check with your HR department or the financial company handling your company 401K to determine if you can borrow funds, the conditions, and what tax consequences you will face if you do not pay it back.
Need More Information on How to Purchase the House from a Spouse in a Divorce?
Contact an Experienced Illinois Property Division Lawyer for Answers
When you are divorcing and really want to keep the family home, leave no stone unturned. Working with an experienced family law attorney will provide you with information regarding options you can explore to reach a favorable result. Contact the Libertyville family law offices of Schlesinger & Strauss LLC for help at 847-680-4970.