What happens to home equity when you divorce?

As someone currently making your way through a Pennsylvania divorce, you are probably experiencing considerable upheaval in your life, and your separation may affect everything from where you live to how often you see your children. While there are numerous matters you and your soon-to-be-former spouse will need to work through, one of the more significant matters you will need to address will involve what is going to happen to your shared home.

According to Nerdwallet, divorcing couples who own their homes have several options at their disposal in terms of dividing up their home’s equity. The first involves simply selling your shared home and dividing the proceeds from the sale between the two of you. A second possible option of dividing home equity involves either you or your former partner keeping the home and refinancing the mortgage to remove the other party’s name.

A third option, meanwhile, involves having both parties in the marriage keep the house for a certain amount of time, but this option is relatively rare. Typically, when divorcing partners choose this option, they do so either in an attempt to wait for the housing market to improve or because they plan to keep the children in the shared home and have each parent take turns living there with them.

Regardless of which option you ultimately choose, the first step in diving home equity during divorce involves determining exactly how much equity you have to divide. To do so, you will need to have your home undergo an appraisal to determine its current market worth. You may, too, want to consider having you and your soon-to-be-ex spouse each finance your own appraisal to avoid unnecessary strife or hardship down the line.

This information about dividing home equity amid divorce is educational in nature and not a substitute for legal advice.


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