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What to Do If One Spouse Wants to Keep the House

Spouses reviewing mortgage documents during divorce
Deciding whether one spouse can keep the home requires careful financial and legal review.

The Emotional and Financial Weight of the Marital Home

For many divorcing couples, the family home is more than just property—it's memories, stability, and security. As a Certified Divorce Coach, Mediator, and Certified Divorce Financial Analyst (CDFA®), I frequently work with clients facing the question: What should happen to the house? It's one of the most significant decisions during divorce, and it often becomes complicated when one spouse wants to keep the home.

At Optimal Divorce Solutions, I guide clients through this decision with clarity, objectivity, and a deep understanding of the emotional and financial implications involved. Whether you're the one hoping to keep the house or the one concerned about fairness, it's essential to understand your options and the potential impact.

Why One Spouse Might Want to Keep the House

Emotional Reasons

  • Preserving stability for children

  • Sentimental attachment

  • Fear of change or moving

Practical Considerations

  • Location close to work, school, or support network

  • Custom features or renovations made by the couple

  • Uncertainty in the housing market

These are all valid reasons, but they must be weighed against the financial realities and long-term implications.

Financial Considerations Before Keeping the House

Can They Afford It?

Just because a spouse wants to keep the house doesn't mean it's financially viable. Here's what needs to be assessed:

  • Mortgage Qualification: Can they refinance the mortgage in their name alone?

  • Monthly Costs: Can they afford taxes, insurance, utilities, and maintenance on a single income?

  • Future Value: Is the home likely to increase or decrease in value over time?

As a CDFA®, I help clients create detailed budget projections and mortgage qualification reviews to assess these questions realistically.

Understanding Equity and Buyouts

When one spouse wants to keep the home, the other typically receives their share of the equity in exchange. This is often done through a buyout.

What Is a Buyout?

A buyout occurs when the spouse keeping the home compensates the other for their share of the equity. This can be done with:

  • Cash

  • Offsetting other assets (e.g., retirement accounts)

  • Structured settlement payments

How Is Equity Calculated?

  1. Obtain a current appraisal

  2. Subtract outstanding mortgage balance

  3. Subtract potential selling costs (if applicable)

  4. Divide net equity between parties (as negotiated)

It's critical that both spouses agree on a fair home valuation. I often collaborate with appraisers and real estate professionals to ensure valuations are accurate and defensible.

Real Estate Expertise Matters

As a Certified Divorce Real Estate Expert (CDRE) and Licensed Real Estate Broker, I specialize in helping divorcing couples navigate the complexities of property division. My experience includes:

  • Coordinating neutral property valuations

  • Advising on timing of sale or refinance

  • Helping clients prepare for mortgage underwriting during or after divorce

  • Selling or marketing the home if neither spouse keeps it

Especially in high-net-worth or luxury divorces, property decisions can become legally and emotionally intense. My dual training in finance and real estate helps prevent costly mistakes and ensures a smoother process.

Refinance vs. Sell: What Are the Options?

Option 1: Refinance in One Spouse’s Name

  • Removes the other spouse from mortgage liability

  • Requires credit qualification and income verification

  • Often part of the divorce decree or settlement

Option 2: Co-Own the House Temporarily

  • Usually only a short-term solution (e.g., until kids graduate)

  • Requires clear written agreement

  • Risky without strong communication and financial discipline

Option 3: Sell the Home and Split Proceeds

  • Easiest way to divide equity fairly

  • Clean break for both parties

  • May delay if housing market is weak

We'll evaluate these options together during the coaching and mediation process to help you find what works best for your situation.

Tax Considerations and Timing

Selling or transferring ownership can have tax implications:

  • Capital Gains Tax (especially if the home appreciated significantly)

  • Mortgage Interest Deductions

  • Property Tax Responsibilities

I always recommend clients speak with a tax advisor, and I coordinate with your financial professionals to ensure nothing gets overlooked. You can also read more on this topic from the IRS website.

Protecting Your Credit in the Process

If you're not the spouse keeping the home, you want to make sure you're released from the mortgage (not just the deed). This is vital to:

  • Protect your credit score

  • Free up debt-to-income ratio for future loans

  • Ensure you're not held liable if the other spouse defaults

This is a step many overlook, but one I address early in the divorce planning process.

When You Can’t Agree: Mediation Can Help

If you and your spouse are at an impasse over what to do with the home, mediation offers a collaborative alternative to litigation. Through Optimal Divorce Solutions, I create a neutral, solutions-focused space where we can:

  • Explore each person’s interests

  • Review financial realities together

  • Generate creative options for settlement

This process often leads to more flexible, customized agreements than what you'd get in court.

Key Takeaways

  • The decision to keep the home should be driven by both emotional and financial realities.

  • A buyout or refinance is necessary if one spouse keeps the house.

  • Equity must be fairly calculated, ideally using a neutral appraiser.

  • Tax and credit implications should not be overlooked.

  • Mediation helps resolve disagreements respectfully and efficiently.

  • Professional guidance ensures no detail is missed during this pivotal decision.

Whether you’re the one hoping to keep the house or you need help negotiating the terms around it, I’m here to help. At Optimal Divorce Solutions, I combine divorce coaching, financial analysis, and real estate expertise to protect your peace, your credit, and your future.

Let’s talk through your situation, answer your questions, and create a clear plan that works. Schedule your free consultation now.

Lisa McNally

Certified Divorce Coach | Certified Divorce Mediator

Certified Divorce Financial Analyst (CDFA®) | Certified Divorce Real Estate Expert (CDRE)

Licensed Real Estate Broker (NH & ME)

Founder, Optimal Divorce Solutions


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© 2025 by Lisa McNally, Certified Divorce Mediator, Coach, Financial Analyst & Real Estate Expert.
Lisa McNally provides professional mediation, coaching, financial analysis, client preparation, and real estate services within her licensed and certified areas of expertise. She is not an attorney, financial advisor, tax advisor, or therapist. For matters beyond the scope of these services, please consult a licensed professional in those areas.

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