10 ways to decide what happens to the family home in a divorce

For most couples, the family home is their biggest capital asset, so deciding what to do with it after a divorce or separation will be one of the biggest decisions they will face.

Trying to reach an agreement on the future of a property may seem a particularly daunting prospect, particularly where children are involved or money is tight. From selling the house after divorce, to finding a way to share the family home with a former partner, there are many ways to move forward.

To help, our Hull-based family law experts have compiled an easy-to-follow guide to 10 of the most common options, including clear and concise explanations of terms such as charge back, mesher order and equity release.

1. Selling the house in a divorce

When trying to decide who gets the house after divorce, a common choice is to sell the family home and share the equity (money) from the sale between you both.

This will enable you to achieve a clean break from one another (in capital terms) and move on. You will both need to consider how much equity there is in the home so you can work out whether there is sufficient money to enable one or both of you to buy another property. How much can each of you borrow and how much will you need to put down as a deposit on a new property?

If there are children who will be staying overnight with each of you, then you will both require somewhere that can accommodate you and the children. If one person’s need is greater than the other’s then an unequal division of the net proceeds of sale may be considered fair.

• Read more about making child arrangements after divorce.

2. Transfer the property to one person

One of you may be able to continue living in the family home and take out a larger mortgage to pay a lump sum to the former partner, releasing them from their liabilities under the existing mortgage and liquidating (giving them access to) their share of the equity in the property. This method can also achieve a clean break on capital and enable you both to move on.

3. Rent out the family home after separating

This usually happens in cases where there is no mortgage and where you both need more time to deal with the property. The rental income may be able cover the rent on two smaller properties for you each to live in whilst longer term agreements are made. If there is a mortgage on the property then the lender will need to be informed that you are renting the property, which may alter the terms as the mortgage would change to a buy-to-let.

4. Charge back

Charge back enables one of you to remain living in the family home and have the property transferred into your sole name. The other person would be released from existing mortgage but would not realise their interest in the family home until an agreed time in the future. You would both agree to various “trigger events” that would lead to the sale of the family home, for example if the homeowner cohabited with a new partner or remarried, or when your youngest child reaches a certain age/stage in their education. The other person’s interest in the property would be secured by way of a legal charge registered against the property at the Land Registry, and when the house is sold, the money would be released to them.

5. Mesher order

Following a separation, a mesher order will also enable one of you to remain living in the family home and they will be responsible for all the maintenance and decorative repairs. However, unlike the “charge back” option above, both of you will remain on the mortgage and deeds. This may obstruct the other person from securing a second mortgage for their own property. The deeds would ordinarily be altered from joint tenants to tenants in common and any structural repairs on the property would be paid for by both of you as per your proportion of ownership. You should agree in advance who will receive what when the home is sold and what the trigger events (that would lead to a sale) should be.

6. Help from friends or family

One of you could remain living in the family home and a family member or trusted friend could replace your former partner on the mortgage so he or she can move out and obtain their own mortgage. A family member or friend may also be able to provide a lump sum to buy your former partner’s interest in the property.

7. Leave the family home to the children after divorce

A deed of trust would need to be created rather than the property being left in a will. A right of abode would be created and the net proceeds of sale would be left to the children. There would be no money for the two of you to use as a deposit for another property unless this came from another source. This is usually only a suitable option if the children are older and if you both have your housing needs already met.

8. Equity release

The option of equity release is generally for older people who don’t necessarily have any dependants to whom they wish to leave money in their will. This option would enable one of you to continue living in the home for the rest of your life, while releasing a cash lump sum to the other person. Financial planning or legal advice would be highly advisable if considering this option.

9. Reconfigure the existing mortgage

This is usually done to help family finances go further and can sometimes enable one of you to remortgage the property in your sole name. The current mortgage can be switched from a repayment mortgage to an interest-only option, or the term can be extended to make the monthly payments smaller. An interest-only mortgage can really help with making an arrangement more affordable.

10. Share the house after divorce

If you are both on good terms, it may be possible to share the house. This could include both of you living in the family home if the property is big enough. There may be enough bedrooms and living rooms for you to maintain some form of “separation”. An alternative option would be that the children remain living in the property and the parents take it in turns to live there with the children. A rental property or home of a family member or friend could be utilised when not staying in the family home. This would require a lot of communication and cooperation to work.

• Read our guide to the pros and cons of a ‘DIY’ divorce.

Divorce and separation advice from sympathetic, supportive experts

If you are going through a divorce or separation, our experienced family law solicitors will provide the very best support and advice. We’ll lift the legal burden and help ensure you get the very best outcome for your family.

Call our friendly and sympathetic team on 01482 326666 or fill in our contact form.