If you are thinking about divorce, you have probably wondered about whether you should try to stay in the family home. This decision can have significant financial implications for both spouses.
Ask yourself these questions when deciding what to do with the home you shared with your former partner after divorce.
Who will have primary custody?
If you plan for your children to live with you for at least half the time after the divorce, you may want to try to keep the home to maintain as much stability as possible. On the other hand, you may want to move into a property you can more easily afford as a single-adult household.
How much is the home worth?
An appraisal is the first step if you have not had one in the past year. Once you learn the value of your home, subtract the amount you owe to calculate your equity. For example, if you owe $100,000 on a property worth $300,000, you and your spouse must fairly share $200,000 in home equity.
Can I buy out my spouse?
This option works if you can afford to pay your former spouse for his or her portion of the equity and qualify to refinance the mortgage in your own name. Both spouses must also agree to this arrangement unless it appears in the divorce order.
If neither of you wants to live in the home or cannot afford to buy the other out, you may want to put the home on the market and fairly divide the profits. If you have significant equity in your home, this route can provide you and your spouse the means to create a financially independent household.
Remember to view the decision about the home as part of the overall agreement you make with your former spouse about marital property.