Should You Keep the House in a Divorce?

One of the questions that many people are first to ask when they are going through a divorce is whether they should try to keep the house. After all, it’s where they are accustomed to living, they want to own property, and they believe that they should keep the home. However, is this always the right decision? It turns out that there are quite a few things that need to be considered before trying to keep the house.

What’s Right for You?

Keeping the home can be a goal, but it doesn’t always have to be. Other things have to be weighed and determined to see what the best path is. There are practical, emotional, and logistical considerations to keep in mind.

Often, it’s not just a legal question of whether you could keep the home. It’s a financial question. Do you have the financial means to care for and pay for the home once you have it? You have to determine your income. You may have to qualify for new credit. There are a lot of questions that are up in the air at this point. You don’t know if you will qualify for spousal maintenance. You don’t know how much child support you could receive. Therefore, you do not know whether you can afford the home or not at this point.

In these cases, your attorney will want to examine your credit to see whether you have good or bad credit. You will often have to start looking for mortgage lenders early. The lender will have to run many scenarios to see whether you can qualify for the home. The numbers they run will often be based on spousal maintenance, child support, and your income. However, when you are in the midst of a divorce, you won’t know those numbers yet.

Trading Other Assets for the Home

There are often situations where someone wants to stay in the home for one reason or another. Sometimes, they will have an emotional attachment to the house. Other times, they might want to stay in the home until their children are finished with the last couple of years of school rather than uprooting them. Regardless of the reason, it can sometimes be tempting to tell the other party that you want the house and will give up rights to other property or assets to keep the house.

In some cases, this could make sense depending on how the property is split in the state. However, you do have to be careful of what you are thinking about giving up. Do you want to keep the house and give up retirement funds? The home has growth and equity, which is tax-free, whereas getting money out of retirement is taxable income. Which one would be worth more down the line? What’s the better deal? All situations are different, and there is no single right answer that’s going to work for everyone.

The one commonality between cases, though, is the need for due diligence to ensure the best decision is made from a financial perspective.

What’s the Worst but Most Common Reason to Hold onto a House?

Often, the person in the relationship that wants to keep the house is the person who was served with divorce papers. The house represents one of the last vestiges of their old life, a place where they were comfortable and happy. Even though they are going through a divorce, having the house gives them a sense of comfort and control.

This doesn’t always mean that keeping the house is the right call to make, though. They have to be sure that they can afford the place since they might have to refinance, as mentioned above. Emotional attachments can make people do things that are not in their best interest. Keeping the house may be one of them.

Always take the time to consider why you want the home before you make your choice. It is to hold onto something that’s going away, namely your marriage and your current way of life? If that’s the case, it could be better to get rid of the home. If you can’t afford the place, it’s going to be a problem.

If you are going to keep the home, make sure that you have more than just an emotional attachment to the place. Make sure that it makes sense from a financial perspective. If you believe that the home will increase in value over the years, then maybe it is worth holding onto.

Always crunch the numbers to see how it will work out in different scenarios. What if you aren’t able to get spousal maintenance? What if you are paying more each month on the property when you refinance? If it doesn’t make financial sense, don’t try to keep the house. You might also want to get a home inspection to see if any issues could affect the home in the coming years. After all, you might not have the income to make large repairs.

Do you need to have as much space as the home provides? If it’s just one person in the home now, it might not make sense to try to keep it. It might be better to sell it and split it. It could make better economic sense. As you can see, there are many things to consider when it comes to keeping a house or not. There’s not an answer that works for everyone.

Talk with an Attorney

In a divorce, there are quite a few things to think about and more moving pieces than you might imagine. This can make it difficult to know the best course of action to take. Should you keep the house? How much should you try to get in spousal maintenance if you even qualify for it? How can you make sure you have custody of your children? Countless things have to be considered during a divorce and you don’t want to go at it alone. Take the time to find a qualified, reputable attorney that can help you with your case.