Divorce House Buyout: How To Keep Your Home

One of the most commonly asked questions during divorce proceedings is: who gets the house?

If you want to keep the home, you can offer to buy out the other spouse. Since you and your spouse co-own the property, you may have options other than providing cash. 

Today, let’s break down the details of a divorce house buyout and explore ways to keep your home.

What Is a Divorce House Buyout?

In most no-fault divorces, the shared marital property between two ex-spouses is divided equally. However, that’s impossible with something like a house; after all, you can’t legally split the home into two. 

That’s why, in many cases, one of the spouses may try to purchase the marital home from the other – if it hasn't already been determined that they will sell the property and split the proceeds. 

The challenging thing is a divorce house buyout involves negotiating a home purchase with someone during emotionally fraught times. Because of this, divorce house buyout negotiations can often be tense and difficult. 

How To Buy Out the House After a Divorce

If you love the house you shared with your ex-spouse and want to purchase it from them, rest assured that there are ways to buy it out after a divorce. 

As you begin working toward a divorce house buyout, consider all the fees you’ll have to pay in addition to purchasing your ex-spouse’s equity. For example, paying for an appraisal and inspection before buying the home can be a good idea, especially if you weren’t present when your spouse originally bought the home.

An appraisal will ensure you pay fair market value for the home, not whatever your ex-spouse claims their equity is worth. That can be a significant advantage if your ex-spouse tries to sway negotiations and walk away with more money than they should.

Let's take a look at three distinct strategies you can pursue:

1. Buy Your Ex-Spouse’s Equity

One way to keep your home after a divorce is to purchase your ex-spouse’s equity. This is possible if you and your ex-spouse owned the home, meaning you built joint equity. Usually, two people who purchase a house split the equity equally.

So, when you buy out your ex-spouse's equity, you pay your ex-spouse for their portion of the home. Of course, just how much equity your ex-spouse has will depend on your state and whether you owned the house before marriage. A knowledgeable divorce attorney can provide you with further assistance on the matter.

2. Refinance the Mortgage

You can also refinance your mortgage to purchase your ex-spouse's portion of the home. This is an especially beneficial strategy if you need more money to buy out your ex-spouse’s equity.

When you refinance your mortgage, you can cash out any equity you’ve built up, then use it to purchase your ex-spouse’s homeownership portion. By refinancing, you’ll also remove your ex-spouse’s name from the mortgage entirely. 

This could be helpful in the future, as it means your ex-spouse won’t be legally responsible for making payments and will no longer have a claim to ownership of the property under any circumstances.

Remember that you’ll have to show your mortgage lender that you have a high enough income to qualify for the mortgage by yourself.

3. Co-Own the Home With Balance

What if your spouse is willing to sell their share in the property, but you don't have enough money or assets to buy it? In that case, you may want to bring a third party to invest in your house: Balance.

Balance will co-own your property with you by purchasing both your and your ex-spouse’s equity, and the equity investment made by Balance will replace the mortgage. By doing so, you can stay in your home and pay Balance a monthly fee, including an occupancy payment and your share of the insurance and taxes.

This is a great way to keep your home if you can’t afford the equity your ex-spouse built up over the years. As a co-owner, Balance shares in the costs, appreciation, and depreciation of your home. Sharing in your future home appreciation allows Balance to offer affordable terms with low monthly payments and flexible qualifying criteria.

With Balance, you get to keep your home and won’t take on additional financial burdens. This can be a big bonus, particularly if you need time to get a new job or raise your income. 

Contact Balance Today

No matter the details of your divorce or your financial situation, there is always a way to perform a divorce house buyout. 

With Balance’s help, you can buy out your home from your ex-spouse even if you don’t have the cash to make the purchase outright. Unlike other options where you may need to forfeit your home, Balance allows you to keep your home and access your equity to consolidate debt, repair the property, build credit, and strengthen your financial profile.

We’ll stick around as reliable investment partners and will always be ready to sell our investment back to you when the time comes — we’re committed to helping create a path for homeowners to improve their credit and finances so they can successfully buy us out in the future. Contact us today to learn more.


How to Negotiate a House Buyout at Divorce | DivorceNet | Divorce Net

Home Equity: What It Is, How It Works, and How You Can Use It | Investopedia

Refinance: What It Is, How It Works, Types, and Example | Investopedia

Home appraisal: Everything you should know | Chase.com

Separate and Marital Property: What Gets Divided in Divorce | Nolo