One of the major questions that divorcing couples face is: What happens to the house in a divorce? The house, after all, is one of the key assets a couple has – if not the biggest. More than just a place to live, the house embodies status and stability. Gaining independent ownership of this asset can be tough, but so is choosing to sell it.
Keeping Versus Selling The House
Figuring out whether to sell the house or keep it can be tricky. It can be quite understandable to choose to keep the house. Most people who are facing divorce have personal reasons for wanting to keep it. For others, the financial load of keeping the house can be complicated.
Deciding to keep or sell the house will depend mainly on your emotional and financial standing. To be able to make a practical and informed decision, there are four things to consider, according to a real estate professional.
4 Factors To Consider About The Family House
Dealing with a shared real estate property in a divorce is a complex process. There will be lots of questions and many things to deliberate over. The following vital pointers can help you decide on what is best to do with the house:
- Can You Keep It?
Not in the financial aspect, but the emotional sense – both yours and the kids, if any. The house comes with it the memories that may evoke feelings of joy, sadness, and regret. Can you keep it without it affecting your well-being? How will keeping it impact the life of your kids? Will keeping the house hinder you from moving forward?
On the other side of the coin, choosing to sell the house rather than keep it has its benefits. It offers both parties a clean break, which makes the idea of selling it agreeable. You both also get to start over in a new environment.
- Are You Capable of Paying the Mortgage?
The answer to this question may put your feelings at the back burner about how you want things to go. Your financial standing is a big deciding factor in this. Getting your spouse’s name out of the mortgage means you will have to sell the property or refinance the mortgage. But refinancing the mortgage means you must have a substantial income; otherwise, it will be challenging to pay off.
You have to determine your capacity to shoulder the full cost of running the household and the mortgage. Aside from the mortgage, there are also things like taxes, insurance, utility costs, and other costs associated with running a household.
- Is the Mortgage Document Under Both Names?
If both of you signed on the mortgage document, then both of you share the responsibility of paying it. If both of you stays on the mortgage and the one who gets the house miss a payment or are late, both of your credit ratings will get affected. Another thing, the spouse whose name stays on the mortgage but is not the one keeping the house may find buying his own home a challenge.
- Will You Be Able to Afford Buying Out the Other?
It is advantageous if the real estate market is not in good condition. However, it still has its risks, like tax implications, among others. Buying out the other person’s share in the house would entail you applying for mortgage refinancing. If you get qualified, the overall cost, including the higher interest rate, would be very high.
What If You Both Want The House?
Things can get more difficult when both parties want to keep the house. In this case, the judge will decide on the matter. Typically, one will be granted ownership of the house at the cost of other properties that he may also have wished to retain. The court will see to it that both parties get their fair share (though not necessarily equal, in some cases) of the assets in the divorce.
When this happens, you may both find you will be losing some preferred assets to the other. That is why trying to resolve the property ownership matter out of the court is better, if both parties are willing to do it amiably.
Get Proper Legal Guidance From Experienced Lawyers
For legal issues involving family matters in divorce in Okemos and the Greater Lansing Area, look no further. The Clark Law Office has been representing people and helping them win their cases for over 30 years. Call us today for a free consultation.