Deciding to divorce can be difficult and emotional. Once you are in the process of resolving the issues in the divorce, however, the focus becomes less on emotion and more driven by the numbers. Apart from the care and custody of children, the majority of issues to be resolved in a divorce are financial and call for a logical approach.
In many families, the home is one of the most significant assets in the divorce. Although talking about the family home can be emotional, the resolution of how to handle this asset must also be practical.
There are two primary ways to resolve what happens with the home. Either one spouse is going to keep the home and purchase the other spouse’s interest (if there is equity in the home), or the home is going to be sold. Often this issue is decided by which spouse, if either, can afford to keep the home. Staying in the home and buying out your spouse’s interest usually involves refinancing the mortgage, and then having the monthly income to make the new mortgage payment each month.
Impact of the housing market
The current real estate market has been a roller coaster, with housing values skyrocketing in some areas. This can directly impact the ability of families in the midst of divorce to afford to refinance. Resolving the issue of what to do with the home has become more difficult. As a result, some divorcing spouses are finding creative ways to deal with the home, even delaying the distribution in the hope that the market will level off and interest rates will come back down.
Consider your life stage when splitting assets
What makes most sense for dividing the home in your divorce may depend on your stage in life. Families with young children may prioritize keeping the home, while divorcing couples who have no children or older children may need to focus more attention on financial stability for the future. More than any other issue to be addressed in a divorce, considering what to do with the home often involves a combination of emotion and logic. Striking a balance between these important considerations can be challenging, but it is critical to reaching a resolution that makes sense. Especially with today’s real estate market, having advice from knowledgeable legal counsel to help guide your decision making is more important than ever.