How to Calculate a House Buyout in a Divorce

How to Calculate a House Buyout in a DivorceDivision of Property. Concept
How to Calculate a House Buyout in a Divorce | Waldemarus/iStock/GettyImages

To obtain a final divorce decree after filing for divorce, separated spouses must enter into a written property settlement agreement dividing their marital assets and debts. Couples with children must also agree upon child support and visitation. If you are going through a divorce, you will need to divide your assets and liabilities and reduce your agreement to a binding written order. If you and your spouse cannot agree upon a division, you will have to go to court. If you have a marital home, you and your spouse must sell your home and divide the assets or refinance and split the equity.

Contact your lender and ask for a residential loan application. If you choose not to sell your house, you will need to refinance your home and assume the mortgage.

Ask your lender to arrange for an appraisal report. You will have to pay for the report, but you may be able to recover half of the appraisal fees from your spouse.

Review your appraisal report. Once you complete your application to refinance your home and obtain a rate lock-in, you will have to find what your home is currently worth. Your appraiser takes many things into consideration when conducting an appraisal, including local market conditions and the average selling prices of similar homes in your area. You can obtain an estimate of what your home is currently worth without an official appraisal by reviewing your local tax assessment for the year. Typically, your tax assessment value is lower than your official appraisal value. However, you will need an official appraisal to refinance.

Find the most recent mortgage statement and look at the payoff box or unpaid loan box. Federal law requires your lender to list the payoff amount on each statement.

Subtract your current mortgage payoff from your appraisal value. The result is the equity in your home. You will have to divide the equity with your spouse, according to your state's property division laws. You may offer 50 percent or any other figure your attorney deems appropriate.

Ask your attorney to propose an amount to your husband or your husband's attorney as the buyout settlement offer. If your remaining payoff amount is $100,000, and your home is worth $150,000, your equity is $50,000. Half of $50,000 is $25,000. You will have to refinance your home for at least $125,000 to receive $25,000 to give to your husband.