The largest asset owned by a married couple is usually their home. Therefore, it’s generally the most contested asset in the event of a divorce. Couples going through a divorce in Minnesota should avoid acting out of emotion when dealing with the family home during the property division process.
There are a few methods of disposition of the marital residence. First it can be sold, either through settlement or decree, with the proceeds awarded to one or split between the parties. Second, it may be awarded to one party by the court. Third, the parties can agree for one party to be awarded the house through a property settlement agreement. In other cases, if a party owned the home before the marriage, the home will usually be returned to that party. If it appreciated during the marriage, the other party may have a claim for equity.
New problems could develop if one party takes ownership of the home. The party not awarded the property will most likely want his or her name removed from the mortgage and absolved of any liability for default. In these cases, the mortgage company may require the property to be refinanced or at least a showing that the party awarded the home can qualify on his or her own.
The latter is often a difficult task, especially when the incomes of both parties were used to qualify for a mortgage. In these situations, a party will often have to obtain a co-signor or sell the property and downsize. If the party’s credit score has been damaged, this makes the difficulty in refinancing more difficult.
During a divorce, it is wise to bring property division issues up with divorce counsel. A consultation with a mortgage professional may also be in order.