Divorce is an emotional process. You will be facing many difficult decisions, including the best way to go about division of assets. One of the biggest assets for most couples is the family home. Deciding who will remain in the home after the divorce requires careful planning and consideration. Read our blog to decide if you should keep the house after a divorce, or if it is better to downsize.
Pros of Keeping the Family Home After a Divorce
There are a few instances when it makes sense to keep the house after a divorce. One of the biggest ones is stability, especially for children. Even if you will be sharing joint custody, keeping the home as the primary residence for the kids can lessen the upheaval they will inevitably feel. It may also help ease the emotional toll on yourself, since you will avoid the stress of selling the home and moving on top of the divorce proceedings.
Another significant reason for keeping the home is the fact that it is an asset. You will continue to build equity in the home with the goal of leaving it as a valuable part of your estate. It is, in actuality, an investment that can pay off in the years to come.
You may have spent years of your life, maybe even decades, in your home. You have presumably spent a great deal of time and money making it a happy and beautiful place to live. For many of us, our house is more than a house: it is an extension of ourselves. Keeping it can help you feel grounded as you start a new chapter after your divorce. A lot of things may change, but where you live will remain the same.
Cons of Getting the House in the Divorce
Divorce requires equitable division of shared assets. When it comes to the house, the asset is the equity you have built over time. This means your ex spouse is entitled to half of said equity. This can have a drastic impact on the value of the home and limit your ability to refinance mortgage payments in the future.
In some cases, you may qualify for a divorce buyout. This is a cash-out refinance program that lets you effectively buy out your ex spouse’s share of the equity. The requirements are similar to those needed to qualify for a mortgage: excellent credit score (at least 620) and a reasonable debt-to-income ratio (no more than 43%), among other things.
If the house will be in your name after the divorce, you will need to qualify for a new mortgage based on your own income, credit score, DTI etc. Paying the mortgage on your own can cause a significant financial burden, especially if you are used to a dual income home. Your ex spouse may be required to pay some of the monthly debt, but there is no guarantee he or she will make the payments on time or at all.
You will also be responsible for any costs associated with upkeep and repairs, as well as homeowners insurance.
Needless to say, if you cannot afford to make mortgage payments on your own, it may not be wise to keep the house.
While many people have positive memories associated with the family home, just as many find it triggers feelings of unhappiness. The property may be a painful reminder of your ex spouse or of unpleasant moments that ultimately led to the divorce. In this case, there is no reason to stay in the house. Divorce can be an opportunity for a fresh start, and this may include finding a new place to call home.
How to Sell a Home During a Divorce
The process of selling a home is stressful at the best of times, but even more so during a divorce. The best way to go about it is to hire a licensed Real Estate Divorce Specialist to handle it for you while you focus on your family. These individuals have received additional training and are versed in local property laws, as well as other finer points of listing a property during a divorce.
If you need assistance selling your home in Colorado during or after your divorce, contact Brenda Kellogg Meyer. Brenda is a licensed Real Estate Divorce Specialist with the knowledge and compassion required during these emotional times. Call or go online today to get started.