A house buyout may be an option during a divorce

On Behalf of | Aug 5, 2021 | family law |

Divorce can be difficult to manage, particularly when it comes to thorny issues like dividing up property and assets. Generally speaking, the largest jointly held asset of a divorcing couple is their family home. Under Illinois law, a couple may have options to split homeownership, including the ability of one spouse to buy out the other.

How does a house buyout work?

A home buyout is when one spouse pays the other for their share of the equity in a home. The purchasing spouse will then assume full ownership rights in the home and be able to stay there, controlling it as their own asset going forward.

To calculate a buyout, couples will need to determine how much equity they have in a home and then determine the other spouse’s share. The amount of equity can be split down the middle, or it can be subject to other negotiations. From there, the purchasing spouse will either pay the other spouse in cash, take out a loan or refinance their existing mortgage in order to make the payment. This decision can be a financially complex and expensive one, so it is important that the purchasing spouse works with appropriate professionals in order to make the decision that works best for their finances after the divorce.

Advantages of a buyout

Home buyouts have many benefits, including smoothly making a transition of a huge financial asset. This also potentially creates stability in the life of a child who is still living in the house and wants to have the same school and community. For these reasons, a home buyout may be an option worth exploring.