Emotions, finances, lifestyle…so much changes when you go through a divorce. At a time when you are under great stress, you face some of the most difficult decisions of your life — what to do with your house, foremost among them.
If you have equity in your home, here are a few options:
- Buy out your spouse. If you’re still living in the marital home, you may decide to buy out your spouse and maintain your residence (often for the sake of your children). But before you take on this responsibility, ask yourself these questions: Can you qualify for a mortgage and afford payments on your own? What about the taxes, homeowners’ insurance, utilities, maintenance (lawn care, painting, etc.)?
- Let your spouse buy you out. If the financial burden is too great, you may be better off selling out your share of the house and buying something you really can afford. Why not make your life easier?
- Sell your home and split the profits. If neither of you wants to take on your marital home, then sell it, split the profits, and each of you purchase separately what you can comfortably afford. Or rent until you have more clarity regarding your financial future.
- Wait out the market. If your house has decreased in value over the past couple of years, you may choose to maintain joint ownership of it until the housing market turns around. This method holds promise (not a guarantee) of a higher sales price from which both you and your spouse benefit.
There are potential tax implications to all of the options listed above so be sure to review all the options in detail. The advice of an experienced Certified Divorce Financial Analyst can help set you on the right path and make sure that your decision is not clouded by emotions.