Here are quite a few factors to consider in deciding who keeps the marital home in a divorce. Each case is different and every option has many considerations for you to think over before making such an important decision. However, the mortgage payment comes monthly, so don’t take too long to decide.
1) Emotional Factors:
- Children’s Home: If you have children, it can be psychologically helpful to keep them in their same home. This makes sure that they can still keep their daily routine (for the most part). They stay in the same school, and have the same friends. Keeping the home for the children can make the transition through the divorce easier on the children, however, it can put a financial strain on the family.
- The Staying Spouse’s Routine: Similar to the children, the spouse who keeps the marital home can keep their routine. Along with divorce, keeping the marital home means not dealing with the added stress of moving. However, living in the marital home after the marriage is over, can also be a daily reminder of a previous life that no longer exists. It can be painful for the spouse left behind. It can also be a point of contention for years between the ex-spouses.
2) Financial Factors:
- Keeping the Home (as is): This is probably one of the worst ideas unless you feel like you and your ex can work together for years and years to come. Normally, though, when a divorce is needed, it’s past the point of being able to cooperate. If you are both kept on the deed and mortgage, you have to figure out what you’ll do if one person decides to stop paying. You have to decide what to do if the one still in the home decides to move, and one person has been paying the bills the entire time. As mentioned above, this can be a point of contention if one spouse is paying the house note (as, perhaps, alimony) and the other spouse is living in the home and reaping the benefits. That spouse may decide to stop paying and then, what happens? Think of these possible scenarios before making this decision. It has worked many times, but it has also failed many times as well.
- Refinance: If one of you decides to keep the home and the other wants to relinquish their interest, the one staying in the marital home may assume the mortgage of the marital home. They will refinance the home in their sole name and the other spouse will be released of the duty to pay on the mortgage. This should be done within a certain number of days from the separation agreement. Otherwise, the other spouse is stuck with no end date as to when their responsibility to the mortgage has ended and they cannot buy another home because they’re still tied up in the previous home. This of course comes with factors to consider such as what is the proper buy out price? In other words, what price do you need to pay to your ex to make giving up your interest in the marital home a fair trade?
- Sale: If you decide to sell the home, you have to decide who gets what portion of the proceeds of the marital home? Is someone going to stay in the marital home? What will that person do in order to make the sale of the marital home easier? Who will the real estate agent be? Who will continue to pay the mortgage until that time? These are important questions to answer before you decide to put the house on the market. You want to make sure that both parties will benefit from the sale. You want the house to sell quickly and for a good price.
- Short Sale or Foreclosure: These are the least favorite options, but sometimes in a divorce these are inevitable. These options are available when one spouse either cannot or will not make a house payment, and the other spouse is either not able or willing to take up the additional responsibility. Check out our blog from Monday for more details on tips on handling foreclosure and divorce.
There are many options in deciding what to do with the marital home. Make sure you discuss all of them with your Attorney and your Accountant.