When a couple faces divorce in any part of the country, it is usually a very difficult issue to decide who keeps the house. However, in Orange County, which boasst famously high real estate prices, a marital home is exceptionally valuable. In many cases, the spouse who lets go of the home is letting go of homeownership entirely for the foreseeable future because of difficulty involved in qualifying for a mortgage.
If you and your spouse are both on the mortgage and the deed to the home, there's good news and bad news. The good news is removing one spouse or the other from a deed is a relatively simple process. However, the bad news is that removing one spouse from a mortgage, specially one that required both spouses' incomes to qualify for, is quite another.
California is a community property state, which means in virtually all instances, both spouses have an equal claim to the value of the home. The way this plays out typically is that one spouse must buy the other out of his or her share of the home's value if he or she hopes to keep it. For many spouse's, this is simply not feasible.
The process can easily become quite expensive. To remove one spouse from a mortgage where two spouse's co-signed, the spouse retaining the home must essentially refinance a new mortgage without the other spouse. Additionally, the spouse keeping the home must find a way to buy out the other spouse's value.
For the spouse who is leaving the home, things are not rosy either. You may be inclined to simply remove your name from the deed and be done with it, but if you choose to leave your name on the mortgage so that your ex can keep the home without refinancing, you are on the hook for any missed payments just as he or she is.
As you can see, deciding how to deal with a home in divorce is no simple matter. It is always wise to have strong legal guidance to help you examine the nuances of your situation and ensure that your rights remain secure as you seek a fair and equitable divorce settlement.
Source: The Orange County Register, "A house divided: 9 real estate questions for couples going through a divorce," Jeff Collins, accessed May 17, 2017