During a Divorce, Is Fighting to Keep the House In Your Best Interest?

When you’re in the process of getting a divorce, you’re facing a number of changes all at once. You may be tempted to fight to hold onto as many pieces as you can of the life you had before, and remaining in the place you are used to calling home can understandably bring comfort during a time of chaos. You may even wish to stay in your house for the sake of your children. However, when working through a division of property as a part of your divorce, it is important to look closely at your motivations for staying in your home, and whether it is truly in your financial best interest to fight to hold on to your house in a divorce.

Can you afford the payments?

While you may want to hold on to your house, you may not have properly accounted for how expensive it will be to keep the home after the divorce. Your individual expenses will likely go up after you are no longer sharing bills and expenses with your spouse, and you may face increased costs of child care after a split as well. The uncertainty of a potential alimony award from the court makes your monthly budget largely unknown until a final hearing. Even if you do receive alimony, if you’re for example just entering the workforce after years of being a stay-at-home parent, the court-awarded alimony payments alongside modest entry-level wages may make covering a monthly mortgage payment challenging.

What is the housing market like now, and where does it seem to be heading?

It may seem like the most desirable option now to stay in your home, even if the real estate market currently favors sale. Perhaps in a year or two after life has settled down, or after you’ve met a new partner, you may decide that you wish to sell, but the market for sellers may not be as strong then. Speak with a real estate professional about whether he/she thinks that selling now might be best, or if you’d be better served for any reason by waiting to sell until the market improves.

Do you have enough liquid or other assets at your disposal to afford an equity payout?

One of the number one obstacles clients often face when they want to keep their home is affording the equity payout. In a divorce or separation, the family court’s goal in dividing marital assets and debts is to make the distribution equitable under the circumstances. If you want to keep the home and you and your spouse have built up significant equity in it, that equity will need to be accounted for in the division of assets and debts. This may come in the form of you paying a lump sum to your spouse to equalize the distribution, you taking less assets elsewhere, or you taking on more marital debt than you would have if you hadn’t kept the home. All these are important considerations to make when you’re facing the decision of whether to fight for the home you love or whether to move on to greener pastures.

Do you have sufficiently strong credit to refinance your home?

If you do, in fact, win the house in the divorce, and there is any outstanding balance on a mortgage, you will likely be required to refinance to remove your former spouse’s name from the mortgage. If during your marriage, your spouse was the primary wage earner or had the stronger credit, you may have a problem obtaining a favorable rate on a refinance, making the home more expensive to keep than it had been to live in with your ex.

Are you overvaluing the home for sentimental reasons?

You may have invested a great deal of time and money into your house, adding features you love and repairing things that were damaged when you moved in. And while you may appreciate the work you’ve done, there may still be a long way to go for the home to be in top selling condition. With the help of your attorney or a professional appraiser, look at the home with the objectivity of an outside purchaser. If the roof is getting older, or an old water heater is about to give up the ghost, these will be expensive fixes, either for a buyer or for you. You can also use these diminishments of market value during your divorce settlement negotiations to ensure that a more realistic value is assigned to the house in the context of a division of assets.

For compassionate and knowledgeable assistance with your South Carolina divorce or custodial action, contact the Spartanburg offices of The Cate Law Firm for a consultation on your family law case, at 864-585-4226.

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