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Steps to take when buying the home in a divorce

On Behalf of | May 13, 2019 | Divorce

Some Louisiana homeowners who are getting a divorce might want to buy out a spouse and keep the home. The first step in this process is getting the house appraised to determine how much equity is in it. This can be done most accurately with an appraiser, but it can be expensive. Some couples may opt for a broker price opinion or a comparative market analysis, both of which can cost less and can be performed by a real estate broker.

Since Louisiana is a community property state, each spouse may be considered to own half of the equity in the home. However, a court may consider other factors as well. The person buying the home will then need to find out what the mortgage will be. This will be affected by whether or not the person has to take cash from the property for the buyout.

It may be useful to refinance the home while the divorce is still in progress. This can help the buyer better assess what the budget will be like after the marriage has ended. Making a decision about the house and taking care of the financial issues around it can also help a couple move on past what is often a contentious point. However, this cash-out refinance might lead to higher interest rates.

In some cases, neither person may be able to afford the home, and if that happens, the couple may decide to sell it and split the proceeds as part of the process of property division. This may end up being somewhat complicated if the market is weak and it takes some time to sell the house. The couple may need to decide how they will continue to pay for upkeep and whether one of them will continue living in the house until it sells or if they will rent it out.