What happens to the house after divorce, I'm the only borrower? - Talk About Marriage
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post #1 of 13 (permalink) Old 01-09-2017, 11:54 AM Thread Starter
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What happens to the house after divorce, I'm the only borrower?

I've got some questions about my house and how it can be handled in my divorce.

- I bought the home prior to getting married in 2009.
- I married in 2010 and now my wife is on the deed, this can be seen on the Allgheny County deed records.
- I refinanced for a lower rate in 2012 under my name only, so I am still the only borrower on the mortgage.

Can I keep this house even if she wants to sell it, which she does? If I can avoid selling, what recourse do I have to get her out of the house once the divorce is over?

I currently have the house listed for sale. Do I have to split the profits with her?

Any other recommendations? I would like to keep the house or buy her out. She won't take a buyout, could I force her to take one? I owe $119,000 and it should be worth $150,000.

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post #2 of 13 (permalink) Old 01-09-2017, 12:08 PM
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Re: What happens to the house after divorce, I'm the only borrower?

If she is on the deed she owns the home as well. The mortgage is a totally different part of the entire puzzle. That is in your name and the bank will be looking for you only. You may buy out her portion if you wish to keep the home. You can not force a buy out. Why would she not want a buy out?

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post #3 of 13 (permalink) Old 01-09-2017, 12:56 PM
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Re: What happens to the house after divorce, I'm the only borrower?

Generally speaking-No you cannot force her to do anything in regard to the house, you can request that the court order her to do any of those things you want to happen, and the court can either agree or refuse.

You being the only borrower is irrelevant. Given that you owned the home prior to the marriage, you'd probably be awarded the house as a separate marital asset in which case you'd be free to do as you please with the house, but the waters are now muddied because you put her on the deed. She will of course make the case that the house is partially hers, for whatever reasons/justifications/lies she and her attorney can possibly come up with and make a claim for 50% of the equity even if she "deserves" far less. I doubt you can legally sell the house if her name is on the deed, she can and probably will file a motion to block the sale of the home and use that as a negotiating tactic to get a bigger piece of the sale proceeds when the house is ultimately sold at some future time (even though she wants it sold).

I've seen cases where the house was unquestionably the property of the husband but the wife was allowed to remain in the house to care for minor children for which she was awarded custody until they were emancipated. Don't know if that's the case with you.

You'll probably have to give her something, but less than half the equity. Unfortunately if this becomes a contested issue you might very well spend more in attorneys fees than whatever the equity share is that you are fighting over, so keep that in mind when you prepare an offer for her.
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post #4 of 13 (permalink) Old 01-09-2017, 01:14 PM
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Re: What happens to the house after divorce, I'm the only borrower?

Since her name is on the deed, she's owner of half on the property.

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post #5 of 13 (permalink) Old 01-09-2017, 01:22 PM
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Re: What happens to the house after divorce, I'm the only borrower?

How much of a down payment did you put on the house?
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post #6 of 13 (permalink) Old 01-09-2017, 01:28 PM
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Re: What happens to the house after divorce, I'm the only borrower?

The house belongs to both you and your wife because you are married. She's on the deed so that further solidifies her rights to 50% of the house.

What she is entitled to is 50% of the equity, not 50% of the total value of the house.

150,000
-119,000
-----------
31,000

So there is about $31,000 equity in the house. She's entitled to half that, or about $15,500.

In addition, if you put a down payment on the house, say $5,000 then ask your lawyer if you can claim your down payment as sole property. that way she would only get half of the equity minus your down payment, or $13,000.

If you want to buy her out of the house, she cannot force you to sell it to someone else. Why does she want to force the sale of the house? Does she think that it will sell for more than the $150,000? Does she realize that if it's sold, you will have closing costs that you have to pay? What does the realtor take at the sale? It could eat up a lot of the equity.
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post #7 of 13 (permalink) Old 01-09-2017, 03:31 PM
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Re: What happens to the house after divorce, I'm the only borrower?

Quote:
Originally Posted by EleGirl View Post
So there is about $31,000 equity in the house. She's entitled to half that, or about $15,500.
I don't agree that her name being on the deed automatically qualifies her for half the equity, especially if he owned the home prior. A court might just award her a percentage of the increase in value during the marriage.

That $31,000 equity will disappear very quickly when you factor in at least 4% sales commission to the broker = $6000 and closing costs which may not be much for the seller but could still be a few thousand dollars so figure another $5000 anyway so that $31,000 is now $20,000 and the odds are the house won't sell for as much as you think it's worth because, well let's face it we all tend to overestimate the value of our assets.

So when it comes right down to it there isn't much equity in the house -if any- and you could even be underwater if the mortgage is in fact more than what the house will sell for.

Either way if you want to stay and she wants out, it all comes down to what she's willing to accept for her half of the equity, which, as I just calculated above, isn't all that much. If you could get away with offering her $10,000 to walk away from the house you'd probably be doing ok.


From Here

Transmutation of Separate Property

Transmutation is another exception to the general rule that premarital assets are a spouse's separate property. Transmutation occurs when you take some action that makes it appear that you're gifting the property to your marriage. This can transform it from non-marital property into marital property -- and give your spouse a right to a share in it. For example, you might convey your premarital home to yourself and your spouse jointly after you marry. Some state courts will consider property transmuted if the two of you live there for many years and raise your family there. However, your spouse would have to prove your intention in court, which can be difficult, particularly if you never used marital money to make mortgage payments or to maintain the property. Some states make it almost impossible to transmute premarital property unintentionally. For example, in California, you must state in a written document that you intend to convert your separate property to marital property -- and that you're making a gift of it to your spouse or to the marital estate.


Then again I found This

Most states are common law property states. So, what does it mean to live in a common law property state? The term "common law" is simply a term used to determine the ownership of marital property (property acquired during marriage). The common law system provides that property acquired by one member of a married couple is owned completely and solely by that person. Of course, if the title or deed to a piece of property is put in the names of both spouses, however, then that property would belong to both spouses. If both spouses' names are on the title, each owns a one-half interest.

So it depends at least in part as to whether your divorce is being done in a community property state.

Whose name is on the mortgage is irrelevant.

You definitely messed up by putting her name on the deed but perhaps most importantly,

There isn't much equity to talk about.

Why is the house for sale if you want to keep it and buy her out? You're obviously better off lowballing the value of the house that way you owe her less.

Last edited by browser; 01-09-2017 at 04:34 PM.
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post #8 of 13 (permalink) Old 01-10-2017, 12:41 PM
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Re: What happens to the house after divorce, I'm the only borrower?

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Originally Posted by browser View Post
I don't agree that her name being on the deed automatically qualifies her for half the equity, especially if he owned the home prior. A court might just award her a percentage of the increase in value during the marriage.
Nope, I agree with Elegirl, since her name is on the deed nothing else matters, she owns half.

"I've paid double for every transgression I've ever made and that motel and that boat are little to ask for"
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post #9 of 13 (permalink) Old 01-10-2017, 01:19 PM
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Re: What happens to the house after divorce, I'm the only borrower?

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Originally Posted by jb02157 View Post
Nope, I agree with Elegirl, since her name is on the deed nothing else matters, she owns half.
Everything matters.

If I was in his position I wouldn't just naturally assume she gets half because it's not necessarily the case.

It's not always so black and white, and that's true of every single factor in a divorce.
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post #10 of 13 (permalink) Old 01-14-2017, 10:30 AM
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Re: What happens to the house after divorce, I'm the only borrower?

Quote:
Originally Posted by browser View Post
I don't agree that her name being on the deed automatically qualifies her for half the equity, especially if he owned the home prior. A court might just award her a percentage of the increase in value during the marriage.

That $31,000 equity will disappear very quickly when you factor in at least 4% sales commission to the broker = $6000 and closing costs which may not be much for the seller but could still be a few thousand dollars so figure another $5000 anyway so that $31,000 is now $20,000 and the odds are the house won't sell for as much as you think it's worth because, well let's face it we all tend to overestimate the value of our assets.

So when it comes right down to it there isn't much equity in the house -if any- and you could even be underwater if the mortgage is in fact more than what the house will sell for.

Either way if you want to stay and she wants out, it all comes down to what she's willing to accept for her half of the equity, which, as I just calculated above, isn't all that much. If you could get away with offering her $10,000 to walk away from the house you'd probably be doing ok.
I agree, adding that it depends entirely on what state you live in plus which judge you get.

You can claim your downpayment as a prior asset. Browser is 100% accurate about calculating equity. You take the appraised value and subtract out the costs to sell. Then subtract what is still owed on the mortgage. This is the true equity in the home. You subtract your downpayment. Divide that by 2. This is the amount of money she is entitled to out of the house.

You might even be able to argue she is only entitled to half the increase in value of the home, but this depends on where you live. Putting her on the title to the house may have given her half the total equity, but it may not. It depends on your laws and courts.

You should file for the divorce rather than waiting for her to file. If she files first it isn't the end of the world but you do lose some potential psychological advantage. Anyhow, in the filing you put all the details including what you claim to be the equity in the home and how much goes to her. She of course files her claim which will probably be different than yours.

In terms of forcing you to sell, no she can't do that. She can ask to keep the house and buy out your half. Or, she can ask for $$ for her half of the value. In the first case you might be fighting with her about who gets to keep the house if you want it, too. That's what lawyers and mediators get paid for, to figure out which way to settle the argument. In the second case the court won't care how you come up with the $$, whether you sell the house or keep the house, just as long as she gets her $$.

Also, the settlement is a bottom line number. You add up all the assets, subtract all the debts, and divide by 2. That is the $$ you are each entitled to. (This is simplified, as you each keep stuff you brought into the marriage, and other special exceptions). You can take your half any way you can get an agreement on. For example, you can keep the house and she gets the cars and furniture. As long as the value of what you get is the number that is agreed upon, you can split the objects and bank accounts any way that works.

She can't force you to sell but she does get her $$.

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post #11 of 13 (permalink) Old 01-14-2017, 01:59 PM
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Re: What happens to the house after divorce, I'm the only borrower?

If you purchased the house prior to marriage and you can bring all the records with the down payment and how munched you paid into the mortgage prior to her name on the deed (BTW dumdass move) then during the separation of assets you can show that your initial investment should be excluded from the martial assests...however it you purchased the house when the market was high and the house value is far less then it was at the time of purchase, then you may not be entitled to the original investment.

Questions back...when you refinanced the home, why was your name on the refinance and not your wife?
Did she sign any document giving up her rights to the house?
Did her salary help in the monthly mortgage of that house and for how long and how much? (Is it documented)
Why did you put her name on the deed at the time? Did she invest any money towards the home?
Did you have a pre-nup covering assests prior to marriage?
Last question...what the hell were you thinking?
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post #12 of 13 (permalink) Old 01-14-2017, 02:19 PM
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Cool Re: What happens to the house after divorce, I'm the only borrower?

If you had the house prior to marriage only in your name and then added her onto the ownership papers for dual ownership, the court would likely have you reimburse her for her share(50/50 split) only from the time she became a principal on the home ownership papers up until the time in litigation that the court elects to remove her, probably involving some convoluted community property formula!

Bottom line is that it will ultimately remain your house!

Make sure that you get your legal counsel actively involved!

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Last edited by arbitrator; 01-14-2017 at 04:01 PM. Reason: Edification
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post #13 of 13 (permalink) Old 01-15-2017, 10:23 AM
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Re: What happens to the house after divorce, I'm the only borrower?

Quote:
Originally Posted by browser View Post
I don't agree that her name being on the deed automatically qualifies her for half the equity, especially if he owned the home prior. A court might just award her a percentage of the increase in value during the marriage.

That $31,000 equity will disappear very quickly when you factor in at least 4% sales commission to the broker = $6000 and closing costs which may not be much for the seller but could still be a few thousand dollars so figure another $5000 anyway so that $31,000 is now $20,000 and the odds are the house won't sell for as much as you think it's worth because, well let's face it we all tend to overestimate the value of our assets.

So when it comes right down to it there isn't much equity in the house -if any- and you could even be underwater if the mortgage is in fact more than what the house will sell for.

Either way if you want to stay and she wants out, it all comes down to what she's willing to accept for her half of the equity, which, as I just calculated above, isn't all that much. If you could get away with offering her $10,000 to walk away from the house you'd probably be doing ok.


From Here

Transmutation of Separate Property

Transmutation is another exception to the general rule that premarital assets are a spouse's separate property. Transmutation occurs when you take some action that makes it appear that you're gifting the property to your marriage. This can transform it from non-marital property into marital property -- and give your spouse a right to a share in it. For example, you might convey your premarital home to yourself and your spouse jointly after you marry. Some state courts will consider property transmuted if the two of you live there for many years and raise your family there. However, your spouse would have to prove your intention in court, which can be difficult, particularly if you never used marital money to make mortgage payments or to maintain the property. Some states make it almost impossible to transmute premarital property unintentionally. For example, in California, you must state in a written document that you intend to convert your separate property to marital property -- and that you're making a gift of it to your spouse or to the marital estate.


Then again I found This

Most states are common law property states. So, what does it mean to live in a common law property state? The term "common law" is simply a term used to determine the ownership of marital property (property acquired during marriage). The common law system provides that property acquired by one member of a married couple is owned completely and solely by that person. Of course, if the title or deed to a piece of property is put in the names of both spouses, however, then that property would belong to both spouses. If both spouses' names are on the title, each owns a one-half interest.

So it depends at least in part as to whether your divorce is being done in a community property state.

Whose name is on the mortgage is irrelevant.

You definitely messed up by putting her name on the deed but perhaps most importantly,

There isn't much equity to talk about.

Why is the house for sale if you want to keep it and buy her out? You're obviously better off lowballing the value of the house that way you owe her less.
Different states apply principles of transmutation differently. Some states, putting the name on the deed makes the entire separate property marital property.

Some states, the separate property remains separate property any pay down of the debt, or the increased equity during the marriage is marital property.

There is no absolute rule that will apply to everyone.

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