This episode of the Divorce and Your Money Show discusses the reasons to consider selling your house when getting divorced. Many people come into the divorce process with strong preferences on this issue because they have an emotional attachment to their house. This episode will help you consider all sides of the issue. It’s a good idea to think about the financial side, because your house is one of your biggest assets. Here are four reasons to consider not keeping the house.
- The house is a burden.
- Refinancing is complicated.
- Homes are expensive to maintain.
- You may end up worse off than you would have if you sold the house.
After divorce, your income as a single person will be lower than it was as a couple, but your expenses will be similar. Given this reality, can you really afford to keep the house? A larger percentage of your income will be going towards your home payment. If your home payment is very low or you live very frugally, it may be possible, but for the vast majority of people, it is not a good situation to be in. It may not be financially feasible for you to stay.
If you have two names on the mortgage, it is difficult to take one person’s name off. From the lender’s perspective, they will want both people to be liable to make sure that payments continue to be made. Since your income will now be lower, it will be hard to obtain refinancing.
A home is more than just a mortgage. There are property taxes, utilities, maintenance, general upkeep, repairs, etc. Are you able to afford all of the expenses?
Sometimes, people want to keep the house to give their kids stability. However, if you are struggling to make payments, will your kids really be better off? Selling the house and downgrading can afford you more financial stability and flexibility. If your home is taking away from your income, it can put you in a tough position. It may do more harm than good.
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