For many couples, the family home is one of the largest assets they own and one of the most emotionally significant parts of their lives. When a marriage ends, deciding what happens to that home can be one of the most challenging parts of the divorce process.

If you are going through a divorce in Massachusetts, you may be asking: Will one spouse keep the house? Should we sell it? How is the equity divided? What happens to the mortgage?

There is no single answer that applies to every Massachusetts divorce. The right approach depends on your finances, your family's circumstances, your children, and the overall marital estate.

At Lamb & Lamb, P.C., we help clients throughout Salem and the surrounding North Shore communities understand their options and make informed decisions about the marital home.

Is the Family Home Considered Marital Property?

Massachusetts takes a broad approach to the division of marital property. Depending on the circumstances, the family home may be considered part of the marital estate even if it was purchased or titled in only one spouse's name.

Courts consider a variety of factors when determining how property should be divided, including the length of the marriage, each spouse's contributions, their respective financial circumstances, and other factors outlined under Massachusetts law.

Because every situation is different, simply looking at whose name appears on the deed may not tell the entire story.

Option 1: One Spouse Keeps the Home

In some divorces, one spouse may want to remain in the family home. This can be particularly important when children have been living there and maintaining stability is a priority.

Keeping the home, however, involves more than simply agreeing that one spouse can stay.

The parties may need to determine:

• How much equity exists in the home

• Whether the other spouse will receive a share of that equity

• Whether the spouse keeping the home can afford the mortgage

• Whether the mortgage should be refinanced

• Whether the other spouse's name should be removed from the mortgage

• Whether the deed needs to be changed

• How taxes, insurance, repairs, and other expenses will be handled

A spouse may also need to compensate the other spouse for their interest in the home's equity through a buyout or another property-division arrangement.

Understanding Home Equity in a Divorce

Equity is generally the difference between the value of the home and the amount owed against it.

For example, if a home is worth $600,000 and the outstanding mortgage is $350,000, the approximate equity would be $250,000.

However, determining the home's value isn't always as simple as looking at an online estimate.

The parties may agree on a value, obtain a professional appraisal, or use another mutually acceptable method. In some situations, additional factors may need to be considered, such as a home equity loan, line of credit, liens, or other debts secured against the property.

Understanding the actual value of the marital home is an important step before deciding whether one spouse should keep it or whether it makes more sense to sell.

What Is a Buyout?

A buyout occurs when one spouse essentially purchases the other spouse's interest in the marital home.

For example, if there is significant equity in the home and the parties agree that one spouse will keep the property, the spouse keeping the home may provide the other spouse with their agreed-upon share of the equity.

That payment doesn't necessarily have to be made entirely in cash. Depending on the circumstances, the parties may structure the overall property division so that one spouse receives other marital assets in exchange for the other spouse's interest in the home.

Retirement accounts, investment accounts, vehicles, or other property may potentially be considered as part of the overall negotiation.

What If the Home Should Be Sold?

Selling the family home may be the best option when neither spouse can reasonably afford to maintain it or when the parties want a clean financial separation.

If the home is sold, the parties will generally need to address:

• The listing price

• Selecting a real estate agent

• Necessary repairs or improvements

• Realtor commissions

• Closing costs

• The remaining mortgage

• Other liens or secured debts

• How the remaining proceeds will be divided

The sale proceeds are not necessarily divided automatically in a 50/50 split. Massachusetts divorce law considers the circumstances of each case when determining an equitable division of marital assets.

Planning ahead can help avoid disagreements and unnecessary delays once the property goes on the market.

What Happens to the Mortgage?

One of the most important issues people sometimes overlook is the difference between ownership of a home and responsibility for the mortgage.

A divorce agreement may state that one spouse will receive the home, but that does not automatically release the other spouse from responsibility to the mortgage lender.

If both spouses are borrowers on the mortgage, the lender may continue to hold both responsible for the loan unless the loan is refinanced, paid off, or otherwise modified in accordance with the lender's requirements.

This is why refinancing should be carefully considered before agreeing that one spouse will keep the home.

The spouse retaining the property should determine whether they can realistically qualify for a new mortgage and afford the home's ongoing expenses.

What If You Cannot Afford to Refinance?

Refinancing isn't always possible or financially advantageous.

Interest rates, income, credit, debt-to-income ratios, and other financial circumstances can affect whether a spouse qualifies for refinancing.

If refinancing isn't practical, the parties may need to consider alternatives. These could include selling the property, delaying the sale under certain circumstances, or developing another arrangement that addresses both the home's ownership and the existing mortgage obligations.

Any agreement involving the marital home should be carefully structured so that the financial responsibilities are clearly understood.

What About Children Living in the Home?

When children are involved, the family home can take on an additional level of importance.

Parents may want to minimize disruption to their children's school, friendships, activities, and daily routines. In some situations, keeping the children in the family home may be a priority.

However, maintaining the home must also be financially realistic.

A house that one spouse cannot afford to maintain may ultimately create additional financial stress. The best solution should take into account both the children's needs and the family's overall financial circumstances.

Don't Forget the Costs of Owning the Home

Mortgage payments are only one part of the cost of maintaining a house.

Before deciding that one spouse should keep the marital home, it is important to consider property taxes, homeowners insurance, utilities, maintenance, repairs, and potentially significant future expenses.

A home that appears affordable based solely on the mortgage payment may become much more expensive once all of these costs are considered.

Creating a realistic post-divorce budget can help determine whether keeping the property is actually sustainable.

What If the Home Was Purchased Before the Marriage?

A common question we hear is whether a house automatically belongs to one spouse because that spouse purchased it before the marriage.

The answer can be more complicated than people expect.

Massachusetts courts may consider property acquired before the marriage when determining an equitable division of assets. The circumstances surrounding the property, the length of the marriage, contributions made during the marriage, appreciation in value, and other factors may all be relevant.

That is why it is important to look at the entire financial picture rather than assuming that the deed or purchase date alone determines what happens to the property.

Get Advice Before Making a Decision About Your Home

The family home is often one of the biggest financial decisions you'll face during a divorce. Whether you're considering keeping the property, buying out your spouse, selling the home, or negotiating another arrangement, it is important to understand the financial and legal consequences before making a decision.

At Lamb & Lamb, P.C., we understand that divorce involves much more than dividing assets on paper. Your home may represent years of memories, financial investment, and stability for your family.

Our goal is to help you understand your options and work toward a resolution that protects your interests and addresses your family's unique circumstances.

If you are considering divorce and have questions about your Massachusetts marital home, contact Lamb & Lamb, P.C. in Salem, Massachusetts, to discuss your situation with an experienced Massachusetts divorce attorney.

Lamb & Lamb, P.C. proudly serves clients in Salem and communities throughout the North Shore and surrounding Massachusetts areas.