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What becomes of your home equity in a New Hampshire divorce?

On Behalf of | Sep 13, 2022 | Divorce |

Your home is your safe haven and also one of the biggest contributing factors to your overall personal wealth. The payments that you make on your mortgage every month gradually increase your equity in the property. Any major improvements or upgrades that you make to the home and its major systems, like the HVAC system, will also increase what the home is worth and therefore how much you would receive in compensation for selling the property.

Your co-ownership of your home may give you pause when you find yourself thinking about divorce. After all, you don’t want to risk losing years of investments in your home. When you understand what becomes of home equity in New Hampshire divorce proceedings, you may not feel as nervous about pursuing a happier future for yourself.

Your home equity is usually subject to division

Most married couples will both be on the title for their property and on the mortgage for it. Even if you are not listed on the ownership paperwork, you have likely contributed both worked toward the property’s maintenance and marital income toward its upkeep.

At least a portion of the equity you have in the home where you live is likely marital property. A judge will have to consider the current fair market value of your home when they make decisions about dividing your property. The equitable distribution rules in New Hampshire require that a judge be fair in their approach to property division. They need to consider everything from your health and earning potential to your custody arrangements and your separate property.

Sometimes, a judge will award the home to one spouse. In such scenarios, it is typical for the spouse keeping the home to need to refinance to withdraw some equity and pay off the other spouse. In some situations, a judge may determine that the best solution is to have the couple sell the home and split the proceeds. You typically have to abide by their decision, even if you don’t agree with it.

You don’t have to wait for a court decision

Maybe you realize that you can’t afford the home on your own, or perhaps your spouse wants to move out of the state following the divorce. Many couples are able to negotiate an amicable solution for property division matters even when they initially disagree about what happens to their biggest assets, like their house.

Through mediation or collaborative negotiations facilitated by your lawyers, the two of you can potentially resolve your disagreements and present the courts with an uncontested property division settlement for review and approval instead of litigating. Learning more about how New Hampshire handles major property division decisions in divorce proceedings can help you employ the most effective approach to the division of your biggest assets.