Married people who own their homes with their spouses must decide what to do with the homes when they get divorced. Spouses understandably hold strong emotional ties to their homes, especially when they raised their children in those homes.
However, keeping a home after a divorce may not necessarily make the best financial sense. Deciding whether or not to keep a house after a divorce requires careful consideration of many factors.
Affordability of the home
A person’s income generally drops after a divorce, forcing a careful and thorough budget review. As explained by Kiplinger, a person considering keeping the family home should not only focus on the mortgage payment. Home ownership costs include a lot more than monthly mortgage payments. Home insurance, property taxes, regular maintenance and unexpected repairs need all factor into the equation.
Value of the home
If a person does wish to keep the family home, both spouses must agree on a valuation for the property. This requires an appraisal and may contribute to some negotiation in the couple’s overall property division settlement.
Qualifying for a mortgage
Bankrate recommends that the spouse who leaves the home should require that the person keeping the home obtain a new mortgage or refinance the existing mortgage into her or his name only. When a joint mortgage remains intact, the lender may consider both parties liable for the debt even if a divorce decree assigns responsibility to one party only. This may happen even when a quite claim deed titles full ownership of the property to the spouse who stays in the home.