When you are going through a divorce, it’s important to understand how different assets will be divided during this process. One asset many do not take into consideration is their home equity, which can be a beneficial tool. If you’re unfamiliar with how California handles equity in a divorce, you’ll want to keep reading. The following blog explores what you should know about these matters and why you should connect with a Los Angeles division of assets attorney to explore your legal options during these complex times.
What Is Home Equity and How Is It Calculated?
Home equity is a term used to represent the amount of financial interest a homeowner has in their home, meaning how much of the home they actually own. Generally, equity is determined by the home’s current market value, mortgage payments, and any renovations or upgrades to the property. This equity will vary over time, as the market will fluctuate and your investment will change with mortgage payments.
Because there are many factors that can influence your equity, you’ll need to determine how much you still must pay on your principal mortgage. Then, you’ll need to estimate the current market value of your home by researching similar properties in your ears. Then you will subtract your loan from the estimated value.
What Options Do I Have For My Equity After a Divorce?
When you and your spouse decide to divorce, your home’s equity is an asset that must be handled. Generally, if one spouse wants to keep the home, they must determine whether or not they can afford the payments and if they can buy out their spouse’s share of equity in the divorce.
You may also be able to apply for a second mortgage to pay off your spouse’s share of the home’s equity. This allows you to keep the first mortgage exactly the same, meaning you will not have to refinance it to pay off your spouse’s share.
However, other couples may decide to sell the home during the divorce. In California, joint assets are divided evenly, as it is a community property state. As such, you and your spouse will likely split the equity evenly regardless of each party’s contribution to the marriage.
Can an Attorney Help Me?
Going through a divorce can be incredibly challenging. As such, it’s important to understand that you should connect with an experienced attorney to explore your legal options during these complex matters. Your divorce can influence your financial future, so letting a lawyer with the necessary experience guide you through these matters is vital to protecting your best interests.
At the Zitser Family Law Group, APC, our dedicated legal team will do everything possible to assist you through these times. When you and your spouse decide to divorce, our firm can help handle the legal complexities of this issue so you can focus on healing. Connect with our team today to learn how we can assist you.
