What to Do With a Home during Divorce

Property settlement is one of the provisions in a divorce decree that cannot be changed. Custody arrangements and child support can sometimes be modified, but decisions regarding property division are final and must be made with careful consideration.

What to Consider in Keeping a Home after Divorce

There are many factors to review before deciding to keep the family home, but the primary consideration is cost. Cost can include:

  • Mortgage payments
  • Taxes
  • Insurance
  • Maintenance expenses associated with upkeep

Upkeep costs can range widely in price, from smaller needs like lawn care to potentially debilitating costs of unexpected repairs like a new furnace or roof.

After taking these fees into account, if you wish to stay in the family home and can afford it, you will need to take the other person's name off the deed. This can be done by refinancing the home in your name after an agreement is included in the marriage settlement.

If unable to qualify for a mortgage independently, co-ownership may be an option. This allows both spouses to own the house and contribute to the mortgage, taxes and upkeep. This can be paired with a termination date, at which point either ex-spouse takes sole ownership or the home is sold.

Options Available if Neither Spouse Wants the Home

If neither spouse wants to keep the home, it can be sold. It is generally best to put the home on the market as soon as this decision is made, but important to continue making payments on time to maintain good credit.

If payments are not affordable, a short sale may expedite the process and help avoid foreclosure. This process is an agreement with the mortgage lender allowing for a sale less than the existing mortgage. If the lender agrees, the borrower may not be responsible for any losses.

If a home is not affordable, people often consider foreclosure. However, experts advise against walking away from the home and mortgage. There are two main reasons to avoid this option: judges often will not sign a marriage agreement that includes a provision planning for foreclosing a home, and foreclosure negatively impacts the owner's credit for seven years. Instead, it may be a better idea to assume the mortgage and file for bankruptcy.

Determining which option best fits your financial needs is difficult. In order to consider all alternatives it is wise to seek the advice of an experienced property division attorney.

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