There is not a simple answer to the question of who gets the house in a divorce. It is, however, a question that comes up over and over as I work with divorcing couples. The family home is one of those marital assets that has memories – both good and bad – and it is a topic fraught with tension when a couple divorces. Here are some key factors to consider when determining who gets the house in a divorce.
This question is not as straightforward as it may seem. Consider these questions.
There are lots of potential reasons for wanting to keep the house, and you may have more than one. Identifying your "why" can help you to evaluate other options that may serve the same need.
I recognize that this can be a pretty tough wake-up call for many. Consider the mortgage, real estate taxes, insurance, utilities, the potential for significant repairs, and costs of general upkeep. The last thing you want to do is start your newly single life in a house that you cannot afford. Also, consider what you are giving up in other assets in your property settlement if you keep the house.
Are your credit and your income enough to allow you to take on the mortgage on your own? I always encourage individuals to speak with at least a couple of mortgage lenders before deciding if they will keep the house, so they know what their options are. Even if you and your soon-to-be-ex have agreed that you will keep the house and refinance into your name, it does not mean that the lender will be on the same page.
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If there are children living in the home, it is very common for the primary caregiver to retain ownership of the family home. Families do this in order to disrupt the children's lives as little as possible. Keep in mind that if you really can't afford to stay in the house, this isn't a good idea. Regardless of the emotional attachment, you and your children will be much more comfortable in a home you can afford.
As I help people work toward an equitable divorce settlement, I often see one party give up retirement assets in favor of keeping the house. Sometimes this makes sense but a lot of time, I think people are too focused on their short-term needs and not fully considering the longer-term implications of their decisions.
Remember, there is no one right answer or a one-size-fits-all approach to deciding who gets the house in a divorce. Take the time to make a solid research-based decision is what will serve you best. It's also not a black or white question. If you need help making this major decision or coming up with a creative house settlement that will work for all involved, schedule a financial consultation.