Divorces and Family Homes: 3 Options on What to Do
For many people, the family house is where the heart is. It’s a place of fond memories and family gatherings. It’s also where many firsts are made, whether it’s welcoming a new child, getting a pet, or learning to cook a new meal. Simply put, it is home.
For most couples, a house is one of the biggest expenditures they’ll ever make in their lives. Given its significance, it’s no surprise why the family house tends to be a sticky issue during a divorce.
Who gets the house? Is it even worth keeping? More importantly, can you afford to keep the house?
These issues are precisely why it’s important to weigh your options carefully before you decide to do anything involving your home during a divorce. Below are a few things to consider in the matter.
1. One of the Former Spouses Keeps the House
When negotiating ownership of a house during a divorce, preferably, the mortgage on the property should be refinanced under the name of the spouse who decides to keep it. That spouse will also need to buy the other spouse’s share on the equity of the property. While the buyout amount is always negotiable, don’t forget that whoever agrees to take on the home will have to shoulder taxes and fees on the property, especially during a future sale.
Below are a few things to consider when keeping the house:
- Get your property appraised. The best strategy is to get two appraisals. If they’re worlds apart, get a third appraisal and agree on a number that’s somewhere in the middle.
- If you want to keep the house, check your finances first. Can you afford to buy out your ex-spouse?
- Consider the costs of your divorce and the costs of maintaining a house on your own, plus your mortgage, insurance payments, and property tax. Is it a good idea to keep the house?
If you decide to give up the house, make sure you get something out of it, such as a greater share of other assets, or better yet, cash so you can get a place of your own.
2. The Ex-spouses Continue to Jointly Own the House
Sharing the family house as a joint asset really only works if the couple divorces on amicable terms. Sometimes couples consider sharing joint ownership of a house until a certain event (youngest child graduates from high school, for example) and then decide to sell at a later time post-divorce. If you’re considering this option, ask yourself if you’re okay staying attached to your spouse financially.
More importantly, be sure you trust your ex-spouse enough to fulfill their end of the bargain—this includes payments on the mortgage, maintaining the property, and property taxes.
3. Selling the House
Selling the family home is usually the “cleanest” option for divorcing spouses. Of course, you need to ask yourself if you’re willing to let go of the house and all the memories you have there. For some couples, a fresh start is what they want, so they’re not as concerned with sentimental value of their house. Still, there are financial issues to consider. For starters, if the value of the property has appreciated, depending on your financial situation, you may owe capital gains on its sale—taxes that will likely be shared by the ex-spouses.
If you or a loved one is going through a divorce and need assistance in deciding what to do with the family house, talk to the family law experts of Lyttle Law Firm. Call us today at 512.215.5225 to schedule a consultation.