One of the hardest assets to deal with in a divorce is the marital home. After all, it is where you have lived for several years. Your children grew up in the home. Everywhere you look, there are memories of holidays, celebrations, good times with your family. Your home is a part of the family.
When you get divorced, you need to look beyond the good times. The house is an asset. Your home carries certain costs and liabilities attached to it. There may be a great amount of equity attached to it or it may have more owed than what it is worth. Often, the house is one of the biggest assets and/or biggest liabilities you and your spouse share. Your focus should be on the economics of keeping the home, and not the emotions that it brings.
Like with any asset or liability, you should review your options fully and decide based on the facts and not on the emotional ties related to the house. Here are some things to consider before making a determination on the home:
- Get an appraisal. Unless you and your spouse are real estate professionals, you probably do not know what your home is truly worth. The annual tax assessment you receive or the numbers you get from an internet search are not true assessments of your home’s value. The only way to know the actual value of the house is to list it and see what someone is willing to pay. An appraisal is going to give you the next-best valuation on your home.
- Meet with a mortgage broker. There is no point in keeping the home if you cannot afford to pay for it. You will likely need to obtain a mortgage to assume the current mortgage and/or to purchase your spouse’s share of the house. Finding out ahead of time whether you will qualify for a mortgage and what the estimated monthly payments will be can be critical in determining whether keeping the home is a viable option.
- Assess your ability to maintain the home. There is more to the house than paying the mortgage. If your spouse was the one who took care of the lawn, cleaned the gutters, made minor repairs and other maintenance of your property you need to think about whether these are tasks you can do (or can afford to hire someone to do for you). You also need to think about how you will be able to handle big repairs, such as a new roof or heating system.
- Consider your children’s ages. If you have a 4-bedroom home, but your children are in their late teens and will be heading to college in the next couple of years, will you want/need such a large home? If your children are young, maybe it makes sense to keep the home or maybe you and your spouse can agree to maintain the home for the children’s sake and then sell it when they are older. If your children are already in college, keeping a large home that they may not return to probably does not make sense.
The question as to whether you should keep the house or sell it is one that will come up in the divorce. It is a decision that should be made after careful consideration and evaluation of all of the options.
Just remember, a house is just a house. The home is wherever you and your family live.