During the Divorce:
Keeping the house. Can I afford it?
There will likely be three options when it comes to your home. These will include: selling the house, buying out your spouse, or having your spouse buy you out.
The best solution for you will depend on both personal and financial considerations. It is very possible that you may simply not be comfortable remaining in your current home, or that you will not be able to or be interested in taking care of the home. On the other hand, making the decision to stay may offer you and your children a sense of continuity and stability.
On the financial side, you need to determine if you can manage the costs of the home with your income after the divorce. These costs would include the mortgage, taxes, utilities, maintenance, and general upkeep. If you decide to keep the house, you need to know if you will qualify for the mortgage on your own. Also, you will need to take into consideration that there will be potential capital gains taxes and a cost of selling the home if selling becomes desired or necessary in the future.
Often, when a proper financial analysis has not been done before a spouse decides to keep the house, they may come to realize later that it is not affordable. Succumbing to emotional decisions that override the financial reality and keeping the home for strictly sentimental reasons may result in being overextended with real estate and supporting obligations. This financial commitment may become a financial hardship and prolong the adjustment to your new financial life.
A CDFA® will guide you through the analysis of your personal situation so that a financial decision can be made considering the various options, future outcomes, and available solutions.
OTHER TOPICS RELATED TO "DURING" THE DIVORCE: