What Is Your Share of the Home Equity in a Maryland Divorce?

Home equity is the value of the home minus every loan secured by it. It is a paper number. It becomes cash only when the home sells or one spouse buys the other out.

Two inputs make the number. The first is the value. The second is the payoff on every loan. Both are easy to get wrong when emotion is high.

Check the math: $600,000 minus $250,000 is $350,000. Minus $50,000 is $300,000. Half is $150,000. Without the home equity line, equity is $350,000 and half is $175,000. One forgotten loan moves each half by $25,000.

Use the payoff, not the statement balance. Ask each lender for a payoff letter. Interest accrues and fees apply. Ask your title company to list any other lien before you agree to a number.

Check the math: $750,000 minus $300,000 is $450,000. The costs are $45,000 plus $8,000 plus $14,000, which is $67,000. $450,000 minus $67,000 is $383,000. Half of the equity is $225,000. Half of the net is $191,500. The gap is $33,500 for each spouse. The 6% commission is an example rate. Commission is negotiable.

Argue about the net, not the equity. The net is the money that reaches your bank account.

Check the math: $720,000 minus $300,000 is $420,000. $780,000 minus $300,000 is $480,000. A $30,000 change in value is 4% of $750,000. It moves each half by $15,000.

This is why you agree on one neutral valuation before you talk about a split. Two opinions give each spouse a number to defend. One shared number ends the argument. Agree in writing on a tiebreak rule if the numbers differ. If a lender funds a buyout, ask whether the lender accepts your valuation or orders its own.

No. You and your spouse set the split in writing. If you cannot agree, the court decides. Maryland Family Law Article section 8-205 contains no 50/50 rule.

Section 8-205(a)(1) says that after the court determines marital property and its value, it is allowed to transfer an interest in property, grant a monetary award, or both. Section 8-205(b) lists eleven factors, including each spouse's monetary and nonmonetary contributions to the family, the value of all property interests, economic circumstances, the length of the marriage, ages, and how and when specific marital property was acquired.

Part of the equity is sometimes not marital property. Maryland Family Law Article section 8-201 excludes property acquired before the marriage, property received by inheritance or gift from a third party, property excluded by a valid agreement, and property directly traceable to those sources. A down payment from before the marriage is one example. Ask your attorney how tracing applies to your house. Gather the closing statement from the purchase and the bank records that show where the down payment came from.

Each spouse needs their own attorney. I am a REALTOR®. I do not give legal or tax advice, and I do not recommend one attorney over another.

I have seen this mistake before. One spouse quotes the value from an online estimate. The other quotes a number from a neighbor's sale. Each spouse builds a plan on a different number. Nothing moves for months, and the carrying costs keep running.

This is where people usually get hurt. They fight over a number that neither spouse has verified.

You should have your own. I am a real estate agent. I do not give legal advice, and I do not work for one spouse against the other.

I am not affiliated with any law firm. I do not recommend one attorney over another. Your spouse needs their own attorney, not yours.

If you need to find one, start with the bar association referral services: