Since your home is typically the largest financial asset you own (and biggest expense), it’s no surprise that deciding what to do with that big asset can be a big bone of contention between divorcing spouses. When deciding whether to keep or sell the marital home, it’s important to consider this decision through three distinct lenses: financial, emotional, and legal.
Financial. The main concern is whether you can actually afford to stay in your house after a divorce. You not only need to pay the mortgage every month, you also have to pay for all the utilities, property taxes, maintenance, and upkeep. More than likely, you’ll also need to qualify to refinance the mortgage in your individual name. To help you decide if keeping your house is an affordable option, it’s important to understand all the real costs to stay. Be sure to consider the condition of your home — you can get a good idea by having a home inspection done by a professional — as it will determine if you would have to budget for large repairs in the near future.
You also need to weigh whether moving will reduce your monthly expenses enough to make it worth the cost. The biggest savings typically come from moving somewhere with lower mortgage payments and property taxes. You’ll need to balance those savings against the costs of moving — real estate agent commissions, legal fees, title fees, and moving expenses.
In addition, you’ll need to weigh what you will be giving up to keep the house, since you ex will need to be compensated for his or her share of the home’s equity in the divorce settlement. Trading other marital assets for keeping the house may not be worth it if that trade leaves you with no retirement savings or cash.
Emotional. Your feelings are certainly valid in the decision-making process about keeping your home. It may hold very happy and special memories for you, or you may want to stay in the same neighborhood so your kids don’t have to change schools or miss their friends. If you have an emotional attachment to your home and want to maintain that stability for your children, you may consider whether “nesting” on a temporary basis is appropriate for your family. Nesting is where the children always stay in the home and the parents transition in and out of the home during their parenting time. While there are financial factors to consider with this approach, it may work for you on a temporary basis during the transitional phase of your divorce.
Legal. Likely the decision to keep your house will be most impacted by the legal and emotional factors, it’s important to seek experienced legal advice about your rights and options from your attorney. Your attorney will recommend the best option for you in terms of selling it and splitting the proceeds, a buyout by one of the spouses, or keeping it for now and selling it at a later date. The ultimate decision about the disposition of your home will be part of the final divorce agreement that must be approved by the court, so be sure you get your attorney’s input before agreeing to anything.
