Family homes often become a big source of contention in a divorce. The sentimental feelings that you may have to your home can be significant – and that can make it challenging to separate the emotional attachment you have from the practical concerns that have to be considered.
Sometimes, it just doesn’t make sense to fight for the family home in a split. At a minimum you have to consider the following:
Can you afford the home on your own?
The question of whether or not you can afford to keep the home is a big one – and you can’t just consider the mortgage, insurance and property taxes. There’s also the maintenance of the property that has to be considered. If you can barely afford the mortgage, you can’t really afford the home.
Do you have the capacity to buy your spouse’s share of the equity?
You can’t keep the home without giving up something else. Your spouse has to be compensated for their share of the home’s equity, so that either means paying them outright or trading some other assets of equal value. This could place a heavy financial burden on you if you only have, for example, your retirement fund to draw upon for this purpose.
Can you refinance the home into your name?
If you have damaged credit or your income isn’t high enough to support a mortgage on your own, you may have a tough time finding a lender who is willing to refinance the property solely into your name. Without that capability, your spouse may not agree to the deal.
Do you really want all your money tied up in the property?
If keeping the house means tying up all your money for the foreseeable future, that may be an unwise move. You would automatically make it difficult on yourself to pursue other goals, such as your dreams of opening your own business, returning to school to further your education or investing.
Before you get stuck on keeping the house in a divorce, it’s always better to consider the alternatives. When you’re going through a marital split, let your head (and your wallet) rule over your heart.
