Dividing Home Equity in a Divorce

• Home value and equity basics
• Factors that influence equity division
• Dividing equity in divorce
• Financial preparations during divorce
• Determining the value of the house
• Community property vs. equitable distribution
• Disagreements about equity
• Pros and cons: keeping vs. selling the home
• Red flags and common mistakes
• FAQ
• Glossary: Home equity and divorce terms
• References

For most of us, our home is our biggest asset. It represents not just a financial achievement – but all that time and energy we’ve invested into making it our own. As if navigating the end of a marriage wasn’t hard enough, now we’ve got this extra layer of complexity – we have to figure out what to do with our house in light of all the competing factors from legal implications and budgeting concerns to future plans and the needs of our kids.

Divorce is tough, but knowing your options and having a plan makes a difference. In this blog we’ll help you understand the fundamentals of a smart, fair, and less stressful way to handle your home at divorce.

Home value and equity basics

The value (often called "fair market value" or "FMV") of your home is how much your home is worth. 

Equity is the difference between the actual value of a property and the amount still owed on the mortgage of the house. If there are other loans, liens, or encumbrances on your house in addition to your mortgage, that will impact equity as well. You can learn more about your property value and how much equity you have by purchasing a property detail report.  

Factors that influence equity division

Several factors can influence how equity is divided in a house buyout or property settlement:

1. Ownership percentage

The division typically reflects the initial ownership share (e.g., 50/50, 60/40). If one person contributed more financially or has invested more in the property, this can influence the split.

2. Contributions to the property

Financial contributions such as down payments, mortgage payments, or home improvements, may impact how equity is divided.

3. Length of ownership

If one spouse resided there longer than the other, they may have a larger stake in the property.

4. Marital or partnership status

In a divorce or separation, equity division is often determined by legal standards, like "equitable distribution" or "community property" laws, depending on the jurisdiction. See more on that below.

5. Existing debts

Outstanding mortgage balances, liens, or other debts tied to the property must be subtracted from the equity before dividing it.

6. Market value changes

The home’s appreciation or depreciation since it was purchased can significantly impact the equity.

7. Agreements or contracts

Pre-existing legal agreements, such as a prenuptial or partnership agreement, can affect the equity split by defining each party's share.

8. Children/dependents

Courts may consider the “best interests” of any children or dependents, especially if one party is staying in the home.

9. Local laws and court orders

In some cases, local laws and court rulings may call for an unequal division based on specific circumstances like financial hardship or caregiving responsibilities.

How to divide home equity in a divorce

It is common for divorcing spouses to disagree on who stays, whether to sell, and ultimately how to divide the value of a home they both lived in (and have been making payments on) for years. Difficult as it may be, calculating the equity of a home is a big part of coming to a divorce settlement and something that we help thousands of separating spouses with each year. 

Sometimes spouses sell their home and split the equity. If you and your ex agree that selling the home is the best option, you can divide the proceeds and part ways. If one spouse wants to keep the house (or only one spouse is qualified to keep the house), both of you will need to find another option to receive your appropriate share of the equity. 

If one spouse wants to keep the home, they must do the following:

• Determine whether or not they can qualify for a financial option that allows them to keep the house
• Determine whether that option makes good financial sense for them 
• Determine the fair market value of the property 
• Determine how their spouse will be paid their share of the equity (Additional details and examples below). 
• Ensure that the terms of the agreement are included in the divorce agreement.

Examples of how equity is divided in a divorce

To determine equity in your divorce (i.e. split the value of your home), you’ll need to assess individual circumstances related to your house or other property. If you keep the home, you need to find a way to pay your spouse their equity. A common example is for one spouse to buy out the other spouse’s interest in the house, usually involving refinancing the home in one spouse’s name so the other spouse is completely removed from all home-related obligations.

If you keep the house, you may take out a loan that is large enough to pay off the existing loan. With this, you can pay your spouse the amount of equity they would be owed. For instance, your house may have an existing mortgage of $100,000 and the same amount of equity. That means the loan you would take out would have to be $150,000, of which $50,0000 would go to the selling spouse to pay off the existing mortgage.

On other occasions, one spouse may trade their ownership interest in the house for some other marital asset (e.g. retirement account) or property, or some other interest, like not having to provide spousal support (or financial maintenance) to the other spouse. Regardless, a refinance is often, but not always required, so the other spouse is not liable for any existing debt that is still on the property. In certain situations, you can even assume your existing loan without having to refinance your mortgage.

When interest rates are high or other factors make a refinance impossible or undesirable, you may want to consider additional options. So, as an example, one creative option Hello Divorce customers have used and loved, is a Sale Lease Back where you sell your home, and rent it back – but with an option to repurchase it later. There are many more options to discover through our HomeSplit calculator. 

A final option is that the house could be sold before the divorce is final. For this to happen, the house must be put on the market, and the deal must close before a judge signs the final decree of divorce. 

What Should You Do With Your Marital Home in Divorce? Explore Your Options.

Our experienced team can answer your questions to help you understand the process and figure out what's best for your specific situation.

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Summary of buyout options

In a divorce, a home buyout is a common solution when one spouse wants to retain ownership of the marital home. The most common buyout options include:

1.  Cash-out refinance: The spouse keeping the home refinances the mortgage for a higher amount than owed, using the extra funds to buy out the other spouse’s share.
2.  Home Equity Loan or HELOC: A second loan is taken out against the equity in the home, providing funds for the buyout. This option offers fixed rates (home equity loan) or flexible borrowing (HELOC).
3.  Personal loan: This is an unsecured loan. While quicker to arrange, personal loans typically have higher interest rates and lower borrowing limits.
4.  Seller financing: In some cases, the spouse selling their share may agree to finance the buyout, allowing the buyer to make payments over time instead of getting a loan from a financial institution.
5.  Asset trade or offset: The spouse who sells their share of the home may receive other assets, like, retirement funds or savings, in exchange for their monetary portion of the home’s equity.

Each option has its pros and cons, depending on the financial situation, the home's value, and both parties' preferences.

Financial preparations during divorce

To calculate how to divide equity in your divorce, you should start by collecting every important financial document you can find. Start by looking at whatever you and your spouse share ownership of (joint assets). This can cover cars, bank accounts, credit cards, medical bills, and your home. 

Find documentation about your joint debts, including your mortgages and loans on your cars, retirement plans, and school payments. Be as comprehensive as you can be in collecting all this paperwork. Don’t risk leaving anything out. If you are a Hello Divorce customer, we will guide you through this process in Step 2. 

For most people, the family home is the most valuable asset they have accumulated during the years of their marriage, which means the value of the home is going to have a considerable impact on the post-divorce finances.

Calculating the value of the home can come down to location, the state of the housing market, the length of time the house has been owned, and several other factors. This makes the division of home equity one of the most financially significant parts of divorce (if not the most financially significant part of the divorce), ultimately amounting to hundreds of thousands of dollars. 

Determining the value of the house in a divorce

There are a number of ways to determine the value of your house for your divorce. You could get a formal appraisal, a comparative market analysis, or a property tax assessment. You could also use Zillow, Redfin, or another online price estimator. Many people start with a property detail report to learn the estimated value of their home as well as other details such as whether or not any taxes are owed or if their spouse has taken out any loans on the property that they were unaware of. 

Factors that influence home equity

Several factors influence the value of home equity and the division of it:

Market value

The home's market value is the primary factor in determining equity. It’s what the home is expected to sell for on the open market. The number can fluctuate depending on local real estate conditions, the economy, and property improvements. A professional appraisal is typically used to assess the value.

Outstanding mortgage or liens

Any balance or outstanding liens reduce the equity in the home. The equity is calculated by subtracting the remaining mortgage balance from the home's current market value. If there are other liens (e.g., a second mortgage), those amounts are also subtracted from the equity.

Home improvements and renovations

Updates that have increased the property's value can increase the home’s equity. However, if one spouse contributed more significantly to these improvements, they may have a larger share of the equity.

Initial down payment/contributions

The original down payment, along with any additional contributions to the mortgage (e.g., who paid the mortgage during the marriage), may be factored into the equity division. If one spouse made a larger initial contribution to the down payment or ongoing payments, they may receive a larger share of the equity.

Market conditions

The state of the local real estate market can influence the equity available for division. In a seller’s market, where property values are high and demand is strong, the equity may be higher. But in a buyer’s market, the value could be lower.

Property condition

Homes that require significant repairs, have structural issues, or are otherwise unappealing to buyers may be valued lower. Well-maintained homes with classic aesthetics are typically worth more.

Property type and location

The type of property (single-family home, condominium, etc.) and its location can significantly influence equity. Homes in highly desirable neighborhoods or those with unique features (e.g., a large lot, scenic views) may have higher market values and equity.

Debt or equity held by both spouses

If both spouses hold joint debt related to the home (e.g., mortgage, home equity loan), the division of equity can become more complicated. This includes determining who is responsible for paying off the remaining debt after the divorce.

Home valuation methods during divorce

Accurately valuing the marital home is crucial for dividing the equity in a divorce. Several methods can be used to determine the property’s value. These are the most common:

Professional appraisal

Overview: A licensed appraiser provides an independent, objective estimate of the home's market value.

Process: The appraiser examines various factors, such as the home's condition, location, and comparable sales (comps) of similar properties in the area.

Advantages: This method provides an unbiased, expert opinion of the home's value, making it useful in contested divorces or when spouses disagree on the value.

Disadvantages: An appraisal can be expensive, and there may be some disagreement over the final valuation between the parties.

Comparative Market Analysis (CMA)

Overview: A real estate agent conducts a CMA by comparing the home to similar properties recently sold in the same neighborhood or area.

Process: The agent looks at recently sold homes that are similar in size, age, and condition. They provide an estimated market value based on these comparisons.

Advantages: CMAs are typically free or low-cost and can give a good sense of the property’s market value.

Disadvantages: CMAs are less formal than an appraisal and may not be accepted in court, especially in high-conflict divorces. They also rely on the availability of recent comparable sales.

Automated Valuation Models (AVMs)

Overview: AVMs use algorithms to estimate property value based on public data, including recent sales, property tax assessments, and market trends.

Process: AVMs are typically used by real estate websites (like Redfin) and can provide a quick estimate of value.

Advantages: AVMs are fast and cost-effective, providing a good starting point for valuation.

Disadvantages: AVMs may not account for unique property features or the home’s condition. They are generally less accurate than a professional appraisal.

Broker’s Opinion of Value (BPO)

Overview: A real estate agent or broker provides a value estimate similar to a CMA but may be more formal and based on a broader range of factors.

Process: A BPO is often used by lenders for short sales or foreclosures and may take into account both comparable sales and market trends.

Advantages: BPOs can be less expensive than an appraisal – and quicker.

Disadvantages: Like CMAs, BPOs are less formal and may not be as precise as an appraisal, which could be an issue if the divorce is contentious.

Tax assessed value

Overview: The assessed value determined by the local tax authority is another option for determining the home's value.

Process: Local governments assign a tax value to homes based on their assessments, usually lower than market value.

Advantages: This is a quick and low-cost option, especially if a recent tax assessment is available.

Disadvantages: The assessed value may not reflect the home's current market value, particularly in areas where home prices have fluctuated significantly.

Choosing the best valuation method in divorce

The method used to determine home value should be based on factors like:

• Agreement: If both spouses agree on the home's value, a CMA or AVM might suffice. If there is a dispute, an independent appraisal or BPO may be necessary.
• Legal requirements: Some jurisdictions require formal appraisals for property division, particularly in contested divorces or if the division is subject to court approval.
• Complexity: In cases involving significant property value or complex assets, a professional appraisal is typically the most reliable method.

Ultimately, the goal is to ensure that both parties receive a fair and accurate division of equity, which is achieved through a reliable home valuation process.

What can you control about the value of your home? 

Improvements

Updating kitchens and bathrooms can make a difference in the value of your home. Updating major systems, like plumbing, HVAC, electrical systems, and roofs, can also make an improvement in what your home is worth. Paint, new flooring, and outdoor improvements make your home more visually appealing, but these will probably have little impact on the overall market value of your home. 

Pay down balances

Second, your home’s equity is determined by what you currently owe on it. This is the outstanding balance on any first or second mortgages or any outstanding home equity lines of credit. You can control this aspect of your home’s equity by paying down principal balances you owe if you can.

Calculating your home’s equity

The first step in understanding how much you are entitled to from your home or any other real estate you own together is by calculating the amount of equity you have in them. This is a relatively simple calculation.

Step 1: Determine the current market value

Find out the current market value of the home, which is what it would sell for today in the open market.

Step 2: Subtract the outstanding mortgage balance

This is the amount owed to the lender(s). Subtract it from the home's market value to determine equity. Then, contact your mortgage lender(s) to request a statement showing the current balance owed. If there are any other debts or liens attached to the property (e.g., home equity loan, tax liens), those amounts should also be subtracted.

Step 3: Account for additional liens or debts

If there are any additional liens or debts associated with the property (e.g., second mortgages, home equity loans, tax liens), these amounts must be deducted from the market value as well.

Step 4: Calculate the equity

Now, calculate the equity by subtracting the mortgage balance and any other liens or debts from the home’s current market value.

Formula:

Home Equity = Market Value of Home - Total Debts (Mortgage + Liens)

Example:

• Market value: $400,000
• Total debts: $270,000 (Mortgage + Home Equity Loan)
• Home equity calculation: $400,000 - $270,000 = $130,000 in equity

Step 5: Determine the ownership share

Equal split: If both spouses are entitled to an equal share (e.g., a 50/50 split), each would receive half of the home equity.

Unequal split: If one spouse contributed more (e.g., more substantial down payment or mortgage payments), the equity split may be adjusted accordingly.

Step 6: Consider additional costs/complications

There may be additional factors that influence the final equity calculation, including:

• Home improvement contributions
• Payments made/to pay during the separation period
• Costs of sale (e.g., agent commissions, repairs)

Step 7: Finalize the division of equity

After determining the total equity and how it will be split, finalize it. The most common ways to do so are a buyout or sale of the property.

Step 8: Update the title and deed

Once the equity division is agreed upon and payments are made, the title and deed of the property must be updated to reflect the new ownership. A deed of transfer or quitclaim deed may need to be filed with the local county recorder’s office to officially remove the other spouse from the property title.

Note: Sometimes there are legal nuances or disagreements about your respective interests in the home. One of you may believe that you are owed a "reimbursement" or "credit" because you used money from a separate source (like an inheritance) to make a downpayment or purchased the property before marriage.

Community property vs. equitable distribution

When dividing property in a divorce, states in the U.S. follow two primary legal systems: community property and equitable distribution. Below is a detailed comparison of each concept, along with their impact on home equity division, state examples, and how the division might differ under each system.

Community property

In community property states, any property acquired during the marriage (except for gifts or inheritances) is considered jointly owned by both spouses, regardless of who earned or paid for it. This means that all marital assets are split 50/50 between the spouses.

In community property states, the home’s equity accumulated during the marriage is usually divided equally between both spouses, even if one spouse was the sole earner or paid for the home.

Equitable distribution

In equitable distribution states, marital property is divided fairly but not necessarily equally. The court considers various factors to determine what is "fair" based on the circumstances of the marriage, the contributions of each spouse, and needs after the divorce. Fair does not always mean equal.

In an equitable distribution state, the court may divide the home’s equity unevenly, taking into account factors such as the length of the marriage, each spouse’s financial contribution, future earning potential, and who will retain the home.

The community property system is simpler, with a strict 50/50 division of marital assets, including home equity, regardless of each spouse’s financial contributions. On the other hand, equitable distribution allows for a more flexible and often unequal division of property based on various factors, such as financial and non-financial contributions, length of marriage, and economic needs post-divorce.

Disagreeing about equity

Equity disputes in divorce often arise when spouses cannot agree on how to divide the value of their home or other property. This can be especially contentious if there are disagreements about contributions to the home (financial or otherwise), the valuation of the property, or the financial capacity of one spouse to buy out the other. 

Here’s a step-by-step guide on how to handle these disputes and come to a resolution:

1. Understand the basics of property division

It’s important to understand the legal framework governing property division in your jurisdiction (either community property or equitable distribution). This will set the stage for how home equity is divided and what factors courts might consider if the dispute goes to trial.

2. Get a professional home valuation

One of the most common sources of disputes is the valuation of the property. Both spouses may have different opinions about what the home is worth, which can lead to conflict over the equity split.

Hire a licensed real estate appraiser neither of you is personally acquainted with so they can provide an accurate, unbiased valuation of the home. The appraisal should take into account the home’s condition, market trends, and comparable property sales (comps) in the area.

If one spouse disagrees with the appraisal, they might request a second appraisal or hire a different appraiser to ensure fairness.

3. Document all contributions to the home

If one spouse feels that their financial or non-financial contributions to the home (e.g., paying the mortgage, making renovations, maintaining the property) should affect the division of equity, it's important to provide documentation.

Gather records of mortgage payments, down payments, home improvement costs, and other financial contributions made during the marriage.

If one spouse was responsible for raising children, managing the household, or other non-financial duties that allowed the other spouse to work, these contributions may also be considered in an equitable distribution system.

4. Negotiate and mediate

If both spouses are open to compromise, negotiating a fair division of equity can be the quickest and least contentious solution.

You can work with their attorneys or with each other directly to negotiate an agreement on how to divide the equity. This can include one spouse buying out the other's share, agreeing to sell the home and divide the proceeds, or other arrangements.

If direct negotiation isn’t possible, a neutral third-party mediator can help the spouses come to an agreement. Mediators are trained to facilitate communication and encourage compromise, which can be especially helpful when emotions are running high.

5. Explore settlement options

One spouse can purchase the other spouse’s share of the home equity. This would involve refinancing the mortgage or obtaining a new loan to pay off the other spouse.

If one spouse wants to keep the home, they may agree to offset the home’s equity value by offering other assets (e.g., savings, retirement accounts, or investments) to the other spouse.

If neither spouse wants to retain the home, the property can be sold, and the proceeds can be divided based on the agreed-upon share of the equity.

6. Consider taxes

When dividing home equity, tax consequences should not be overlooked. Certain decisions can trigger tax liabilities, which could affect the final amount each spouse receives.

1.  Capital gains tax: If the home is sold and its value has increased since the purchase, there may be capital gains taxes on the sale. In some cases, married couples can exclude up to $500,000 of capital gains if they meet certain conditions, but this may not apply in divorce situations.
2.  Tax filing status: If one spouse buys out the other, it may affect their tax filing status for the year. The spouse retaining the home may be able to deduct mortgage interest payments, while the spouse who sells their share may need to consider the tax implications of receiving cash or other assets.

7. Legal assistance as a last resort

If a resolution cannot be reached through negotiation or mediation, litigation may become necessary. This involves presenting the case to a judge, who will make the final decision on how the home equity will be divided.

8. Consider Alternative Dispute Resolution (ADR)

Beyond traditional mediation, there are other ADR options available, such as collaborative divorce or arbitration.

9. Get emotional support if needed

Home equity disputes can become emotionally charged, especially when both spouses have strong feelings about the family home.

Divorce counseling or therapy can help spouses manage emotions and reduce conflict, which can make it easier to reach a resolution. Both parties should try to focus on what is best for their future stability rather than getting mired in past disagreements.

Ultimately, it's best to resolve these types of issues out of court to avoid spending thousands of dollars on lawyer fees. Schedule a meeting with your local attorney or one at this link to discuss your specific situation or the two of you can meet with a mediator (together or separately) to get to an agreement that is fair under the circumstances. Our mediators collaborate directly with our financial advisors and divorce real estate experts so that you have a team of professionals helping you get the best result possible under the circumstances.

The best part about an out-of-court solution is that you get to maintain power over what the ultimate result is. If you start involving the court and you can't get along, the judge would likely order a sale of the property which is often not in the best interest of either you or your spouse. 

Suggested: Home Equity Buyout Calculator

Spouses can come to a mutual agreement on the value of the house, but it is also possible that you and your ex might have your own reasons to value the house differently. Even if you don’t see eye to eye on this, it is important not to create an imbalance in the marital estate by settling on an equity value that is too far from a reasonably realistic figure. 

If this kind of disagreement exists between you and your ex, a real estate appraiser can offer an independent appraisal of the value of the house. You could also get a real estate agent to give you a market analysis to best estimate the property’s value. 

As a last resort, the divorce court itself could rule on the value of the property. However, this is the most expensive option. 

How to handle disputes over equity with outside help

During your divorce settlement process, having an accurate equity figure is essential to ensure that property division is fair. 

While most couples can agree on that figure, there are times when spouses have differing interests in valuing a home’s equity higher or lower. While a professional appraiser (and even a few appraisers) can provide an accurate picture of a home’s value, some divorcing spouses will still not agree to a figure, how to divide it, or what to do with the marital home. 

Hire help as needed for a better outcome

Like any other divorce dispute, equity and property divisions are loaded matters. As a divorcing couple, you may not be feeling particularly cooperative. If this is the case, you may have to rely on your attorney or get the help of a divorce mediator. 

A mediator will be able to focus on the issues you’re still at odds with without taking one party’s side or the other. This, alone, usually fosters more cooperation than if both parties bring their own battling attorneys to the table. But it’s still important to be careful. You want to have a good understanding of what your home’s equity is. Accepting a figure that isn’t accurate is not in your best interests. 

Each time an appraisal is completed, or a market analysis is done, it is at a cost to the marital estate. But by far, the most expensive way to have the disagreement settled is by having the court rule on it. If possible, that should be your last resort. 

Pros and cons: keeping vs. selling the marital home

There are many factors to consider when deciding whether to keep or sell your marital home after divorce. Here’s a visual table to help you understand your options.

The bottom line: keeping or selling your marital home will be a highly personal decision. Consider all your financial and emotional angles before making any hasty decisions. 

Red flags and common pitfalls in home equity division

Dividing home equity during a divorce or separation can be a complex process, and there are several common pitfalls that parties involved may encounter. These issues often stem from misunderstandings, poor planning, or failure to account for all factors involved in the division. Here are some common mistakes:

1. Inaccurate home appraisal

Relying on outdated or inaccurate appraisals can lead to an unfair distribution of equity. Ensure that you hire a qualified, independent (not one of your friends or family members) appraiser to assess the current market value of the property. Both parties should agree on the appraiser to avoid disputes over the property’s value.

2. Omitting outstanding debts

Ensure that the mortgage balance and any other debts attached to the property (e.g., home equity loans, tax liens) are subtracted from the home's value when calculating equity.

3. Ignoring the cost of selling the home

Some people overlook the costs associated with selling the property, such as realtor commissions, repairs, closing costs, and other fees. Subtract anticipated selling costs from the home's value to arrive at a more realistic equity figure. These costs can be substantial, often 6 percent or more of the sale price.

4. Not considering the tax implications

Consult a tax professional to understand how the division of home equity might impact taxes, especially if one of you is buying out the other or if the home is being sold. Capital gains taxes could be a concern, depending on the circumstances.

5. Assuming it needs to be a 50/50 split

Equity division should be based on more than just ownership percentages. Consider other factors like non-financial contributions (e.g., caregiving, homemaking) and the needs of each party (e.g., housing stability, children’s needs). In some cases, an unequal division may be more appropriate.

6. Overlooking existing agreements

Ignoring existing prenuptial or postnuptial agreements can complicate the division of assets, including home equity. Review any agreements that were made prior to the marriage or during the marriage to understand how they may affect the home’s equity division. These agreements may supersede general property division rules.

7. Not considering the home’s future

Ensure that a buyout or sale now or later is realistic and that both parties agree on the logistics, including how and when payments will be made. Account for the possibility of future appreciation or depreciation in the value of the home. This may involve setting aside a portion of the equity for future recalculation.

8. Disregarding non-marital and non-monetary contributions

Failing to consider non-marital contributions to the home (e.g., one party's inheritance or a down payment from family funds) can lead to an unfair division of equity. If one spouse contributed non-marital funds to the purchase or improvement of the home, these contributions should be tracked and accounted for in the equity division. And if one spouse stayed home to take care of the house or dependents, this might warrant a larger share, regardless of what they personally paid.

9. Overvaluing emotional attachments

One or both parties may overvalue the emotional attachment to the home, which can cloud judgment and lead to unrealistic expectations about the division of equity. Try to detach emotions from the financial process. Make decisions based on the fair market value and your financial situation, rather than emotional factors, to prevent prolonged disputes.

10. Poor communication

Open and transparent communication is key. Consider mediation or the assistance of a neutral third party (like a CDFA) to facilitate discussions and ensure that both parties' interests are considered.

Need help understanding your home-related options?

Download Divorce & Your Home, our free three-step home solution with tips and worksheets to help you understand and make the most of your home's equity.

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FAQ about dividing equity in a divorce 

Will I get half the equity, or half the value of the home, when I divorce my ex?

Not necessarily. Distribution of assets during a divorce does not necessarily mean that things are split evenly. Various factors come into play in determining what percentage of equity you get.

Can I get my equity share before the house is sold?

You and your ex would have to agree to this, or you would have to convince the court to order this. 

Does equity get split evenly when the home is sold? 

If both you and your spouse contributed equal amounts to the house, including the down payment and mortgage payments, the proceeds may be split 50/50. If one spouse contributed more or various other factors come into play, however, the proceeds may be divided differently. 

What if my ex refuses to split the equity in the house?

If your ex fights you on equity, legal assistance can help you learn your options. You are entitled to a portion of the proceeds of the sale of the home, and if you’ve paid the mortgage, that will make a difference in what the court awards you. 

How can my spouse and I divide the equity fairly?

A mediator can help you through the process of ironing out the details of your divorce, such as dividing equity. Using a mediator is much less expensive than hiring a divorce attorney and battling it out in court.

Glossary: Home equity and divorce terms

Equity

Equity is the difference between the value of your home and what you owe on it. For example, if your home is worth $400,000 and your mortgage has a balance of $250,000, you will have $150,000 in equity. When dividing the value of your marital home in your divorce, equity will be the figure you will use. 

Marital assets

Marital assets are anything you and your spouse have acquired during the time you were married. Things you owned before are considered separate assets. During property division, you and your spouse are only required to divide your marital assets. Each of you keeps your own separate assets.

Property division

During the divorce process, both partners are legally entitled to a fair share of their marital property, meaning both their marital assets as well as their debts. Depending on where you live, marital property will be divided according to your state’s laws, or you and your spouse can come to an agreement that you consider fair together.

Equitable distribution

States have different ways of determining fair property division in a divorce. Equitable distribution states use many factors to decide what is fair in any given situation. These factors will include what each party has contributed to the marriage, the duration of the marriage, the economic needs of both parties, the ages and health of each partner, and more. 

Community property 

In a community property state, marital property is considered jointly owned and must be divided equally between spouses in a divorce. Only nine states recognize community property laws. 

References