Keep, Sell Or Buy Out: What Happens To The Marital Home In A Harford County Divorce

Ask a divorcing couple which asset keeps them up at night, and the answer is usually the house. It is often the largest investment they share, it carries the biggest debt, and it is where the kids sleep. Not surprisingly, the question of what happens to the house in a divorce comes up early and stays late.

Maryland law gives couples and courts several ways to resolve it. Most outcomes fall into one of three paths.

Path One: Sell and Split the Proceeds

When both spouses own the home, a sale is always on the table. Under Md. Code, Family Law § 8-202(b)(2), a court deciding ownership of property owned by both parties may order a partition, or a sale instead of partition, with the proceeds divided. Many couples reach the same result by agreement, listing the home and dividing what is left after the mortgage and sale costs are paid.

Path Two: One Spouse Buys Out the Other

Maryland law also gives courts specific tools for a jointly owned home that served as the couple’s principal residence. Under Family Law § 8-205(a)(2)(iii), and subject to the terms of any lien, a court may:

• Transfer one spouse’s ownership interest to the other, as long as the spouse receiving the home obtains the other’s release from any lien
• Authorize one spouse to purchase the other’s interest on terms the court sets
• Do both

When a court sets those terms, § 8-205(b) requires it to weigh a list of factors, including each spouse’s monetary and nonmonetary contributions to the family, their economic circumstances, the length of the marriage, each spouse’s age and health, and how and when the property was acquired.

Path Three: Keep the House by Refinancing or Assuming the Loan

The lien-release requirement is often the hardest part of keeping the house. Traditionally, the spouse staying put had to refinance into a new loan in their own name, sometimes at a higher interest rate.

A 2025 Maryland law opened another route. According to the Maryland Office of Financial Regulation, House Bill 1018 took effect on October 1, 2025. It requires conventional home mortgage loans to include a provision allowing a borrower, following a divorce decree awarding them the property, to assume the loan and buy out the co-borrower’s interest, as long as the lender determines the borrower qualifies. A few points stand out:

• The requirement applies to conventional home mortgage loans and excludes loans insured or guaranteed by the federal government.
• The law applies retroactively to many existing mortgages when the divorce decree is entered on or after October 1, 2025.
• The assuming spouse still has to qualify with the lender.

Occupancy Is a Separate Question

Maryland also allows courts to award temporary use and possession of the family home in some cases involving children. That decides who lives there for a period of time, not who ultimately owns it.

Talk to a Bel Air, MD Divorce Attorney Today

Whether the house is sold, transferred, or kept through a refinance or assumption, the decision affects your finances for years. Schlaich & Thompson, Chartered, helps Forest Hill and Harford County residents understand their options for the marital home. Contact our Bel Air divorce attorneys today, and we will walk through what each path could look like for you.

Source:

labor.maryland.gov/finance/advisories/advisory-ind-marylandlawmortgageassumptionupondivorce.shtml