Becoming newly single will bring many changes in your lifestyle. It may also bring a change in where you live. There’s a lot to think about:
- Should you sell your house and split the proceeds?
- If you decide to sell, should you do it now or wait to do it later?
- Should you or your soon-to-be ex-spouse take full ownership?
According statistics, most divorcing couples decide how to divide their property and debt among themselves.
About 90% reach an agreement without taking their case to court. It’s the fastest, cheapest, and usually the least confrontational way to make the break.
But, What Happens If We Can’t Come To An Agreement?
If you and your spouse cannot come to agreement on a property settlement, a judge (or in some cases, a mediator) can step in to divide your marital assets, going this way maybe an expensive and time-consuming process.
Unless the couple can make distribution decisions on their own or with the help of attorneys, a judge will determine what the division of property will be on a case-by-case basis depending on the specifics of each divorce’s facts. Your divorce lawyer can help you understand what the settlement may be in your particular situation.
How Do You Divide A Home?
Basically, there are four options to consider:
- Sell the house immediately.
- Keep the house in both spouses’ names, with only one as the occupant, with an agreement to sell at a defined point in the future (such as mortgage maturity or when the youngest child graduates).
- One spouse gives the other title to the home.
- One spouse takes cash out of the home’s equity to buy out the other spouse.
Sell The House And Move Forward Versus Keep The House…
You’ll need to take a hard look at your financial picture to determine whether you will be able to afford to maintain your current home or whether you’ll need to start over. In some cases, keeping the current home may not be the best financial decision for you.
To start a new chapter in their lives, most of the times couples decide that the best thing to do is to sell the house immediately, pay off the mortgage and any other liens, split the proceeds, and both move on with their lives either renting or buying a more affordable residence.
Time To Crunch The Numbers…
Housing costs are only one of the financial responsibilities you’ll be carrying as a newly single person, but are the most expensive costs from your monthly expenses.
If you are considering keeping the marital home, you should know up front whether you actually can afford it.
To find out, you will need to have an understanding of your monthly budget so you can have a realistic view of what your finances will look like on a single income.
Calculating Housing Expenses
Before you make any decisions about what to do with your home, use the following list to begin calculating your house costs. Carefully think about any additional expenses not listed here to add it to the list.
- Mortgage Payment
- Home Equity Loan or Line of Credit Payment
- Property Taxes
- Homeowner’s Association (Condominium) Fees
- Insurance (Homeowners)
- Cable TV
- Lawn Maintenance
- Garbage Service
- Internet Service
- Routine Maintenance
- Cleaning Service
Add all the above expenses to calculate your TOTAL Monthly Housing Expenses.
A New Beginning…
Armed with this information, you will be able to make informed decisions about the best alternatives for you regarding the marital home.
This exercise will take you some time but will save you from expensive and unpleasant surprises in your soon to come new life.