Most married couples face challenges in their relationship at some point. A problem that one couple might be able to resolve might be the breaking point in another couple’s marriage. If a spouse files for divorce in Virginia, there will be additional issues to resolve, many of which have to do with finances, especially home equity.
It is important to understand the implications of equity in a divorce. A spouse who hopes to avoid negative surprises or confusion in court will learn as much as possible about equity issues ahead of time. For instance, if spouses decide to sell the house, how will equity be divided? Or, if a spouse wants to keep the house, how might that affect the other spouse’s finances?
Virginia is an equitable division property state
In this state, marital assets are divided equitably in a divorce, which does not necessarily mean a 50/50 split. If spouses cannot agree on how to divide marital property, the court can make the decision on their behalf, at which time the judge overseeing the case will determine what is fair. If one spouse will continue living in the house with a mortgage that both spouses acquired together, that individual would typically have to refinance any mortgage that obligates the other spouse. Otherwise, the other spouse’s credit rating could suffer if the spouse living in the house falls behind in mortgage payments.
Comp sales and appraisals help determine equity
To determine how much equity exists, it’s crucial to know the value of the home. Having a comparative market analysis or formal appraisal done is often the quickest way to value a home. The net equity of the home is calculated by subtracting the balance on any mortgages regarding the property, along with the expenses of sale, from the sales price or appraised value of the home. A spouse in Virginia who is concerned about equity issues in a divorce may request a consultation with an attorney who is well-versed in family law property division issues.