One of the more contentious aspects for separating couples is deciding who gets the house in a divorce. Though this can seem like an important victory for one party, it can also end up being a huge financial weight around that person's neck and, in some cases, it may actually be best for neither party to keep the home.
First, you need to determine whether either of you truly wants the house. If neither spouse has any interest in maintaining the marital residence, then you may be better off simply selling the home, or if the market is depressed, consider the possibility of renting it out for extra income. However, if both spouses want the house, the fight may be a long one, and it will likely involve lengthy negotiations to decide who will have to part with it. If only one spouse wants the house, it simplifies matters and allows both parties to focus their attention on creating an equitable division plan that allows for that to happen.
Once you have determined how each person feels about the house, the next and possibly most important question is whether he or she can afford the home. It is critical to consider whether that person has sufficient income or other financial means to afford paying all of the expenses related to the home. Remember, there is far more to consider than just the mortgage expense, such as property taxes, homeowners insurance, maintenance, and repairs. If the person simply doesn't have the money to maintain the house, then other options (like selling the house) need to be considered, even if they may be painful.
One final issue to consider is whether the spouse who wants the former marital residence will be able to have the mortgage, second mortgage, and/or equity line of credit refinanced into his or her own name. It is important to remember that if the mortgage was issued in both names, both parties will remain liable for the debt until that debt has been paid in full or refinanced. Typically, the parties will agree that the spouse receiving the home will refinance the mortgage within a specified period of time. Therefore, the person who wants the home should determine as early as possible whether he or she will be able to refinance, as failing to do so will cause problems for everyone down the road.