According to a recent report from the National Association of Realtors, homeowners in Atlanta and around the United States purchased more than 500,000 vacation homes in 2011. This was an increase of 7 percent from the number bought in 2010. So with more couples buying second homes, it follows that more couples are finding themselves disagreeing on how to divide their second home in divorce.
Because they are not the primary residence, second homes can add a tricky aspect to the property division process. However, they are similar to first homes in many ways. Divorcing spouses often decide to simply sell the home and split the proceeds. But the same economic factors that made that home affordable to them may make it impossible to sell for a profit – or at all.
While the housing market is beginning to show signs of recovery, this is generally not the case for vacation houses as home values continue to fall. In fact, the National Association of Realtors reports that the median sales price of vacation homes fell by 19 percent from 2010 to 2011, when it reached a low $121,300.
Therefore, the best option may be to refinance the home. While it is fairly uncomplicated to remove one spouse’s name from the house’s title, it is less so to remove a borrower’s name from a mortgage loan. As such, a homeowner who wishes to get his or her former spouse’s name off of the mortgage will have to refinance it in his or her name alone. Homeowners are advised to take to a family law attorney or financial planner before deciding to go this route.
Source: Pegasus News, “Separating collateral: How to deal with a second home during divorce,” Candy Evans, Oct. 1, 2012