For most couples, the biggest asset they own is their house – and that means it’s often the biggest financial challenge that must be addressed during a divorce.
Selling it and splitting the proceeds is often the easiest, quickest way to deal with the house, but you may not be emotionally ready to let go of the home you’ve loved, repaired and decorated over the years. Or, you may worry that uprooting your children from the only home they’ve known during your divorce will be hurtful. Keeping the house might be an option, but here are a few things you need to consider:
Can you afford to keep the house?
“Keeping the house” includes not just mortgage payments, but also property taxes, insurance, home maintenance, routine (and not-so-routine) repairs and other house-related expenses. Consider your income, assets and debts, and think about how keeping the house will affect your financial stability. If you’re going to be stretched financially thin, you may want to reconsider.
Can you afford to refinance?
If you keep the house, you’ll need to refinance it out of your ex-spouse’s name. Whether you have the ability to do so depends partially on your credit score and income, so you need to find out if that’s even feasible. You also need to consider the fact that refinancing may put you at a higher interest rate – and that could make your monthly mortgage harder to afford.
Do you really want the house?
Don’t get focused on the idea that keeping the house has to be a goal. You may simply not want to keep living in the home where you once cherished dreams of a different future. If so, there’s no harm in starting over somewhere new.
Whatever you do with the family home in your divorce, you’ll need to get a good understanding of its current market value and what you owe. This can help you negotiate a fair settlement with your spouse, or decide whether it’s financially feasible to keep the house on your own. Experienced legal guidance can help you explore all your available options.