Fighting over who keeps the house after divorce is a big issue most couples face when approaching their settlement agreement. Whether it is because of sentimental value, or so the kids don’t feel like their lives are being uprooted, or simply because of its financial value, the family home is one of the most sought-after and important assets in a divorce.
It is important to determine whether EITHER of you can afford to keep the house after the divorce. This is because a house costs more than just the mortgage. You need to factor in the real estate taxes, and insurance into that number. If you own a condo or townhouse, usually there are also homeowner’s association dues.
Something else to keep in mind is that you may need to refinance your home in order to buy out your spouse’s interest in the home. This means that the mortgage payments will likely increase. You need to make sure that you have enough money for the new mortgage payments, as well as your other expenses, such as utilities, groceries, car insurance, etc.
There are other costs and maintenance involved with owning a house to consider. You may run into issues down the road that may require cash for some major, or even minor repairs. This includes things like replacing or repairing the roof, fixing the heating or air conditioning system, etc. If you have any major appliances that are old (such as your refrigerator or your oven), you may need to repair or replace those as well.
And then there are the non-monetary maintenance to consider with owning a house. This includes cutting the grass, shoveling snow, raking leaves, and other yardwork that is required to maintain your house. If you don’t have the time or energy to do this yourself, then you may find yourself spending even more money to hire someone to do it for you. You need to be prepared to take over every aspect of owning a home by yourself.
You will likely need to refinance the home after the divorce. If your spouse is on the mortgage, you will need to refinance to take his/her name off the mortgage and take a lump sum amount to pay your spouse for his share of the equity in the house that you intend to keep. The first step is to find out whether refinancing is even possible. If not, there may be other ways to keep the house, as long as your spouse agrees.
There are many reasons that you may want to keep your house, but before committing to keeping the house, you need to factor in every cost and issue that may come with owning a house to make sure that you still want to, and most importantly, can. You may find that it is smarter to sell the house and divide the proceeds from the sale and instead find a more affordable home to live in, even if it isn’t the family home that you’ve had for years.