Splitting up a House in a Divorce
There are primarily three options for your house. The options are:
- Sell the House, Split the Profit
- Buy the Other Out.
- Somehow, Hold on to the House Together
So, how do know which of these options is right for you?
This depends entirely on those getting divorced. Here are some questions to ask yourself if you are questioning whether to sell your house to a home buyer, or utilizing another option:
1. Income Requirements: What are the income requirements to keep rather than sell a house? For example, is there a remaining mortgage? What are the taxes and/or insurance? Is the home older, requiring more frequent maintenance or upcoming necessary upgrades?
The cost to keep the house helps determine which person can afford to keep the house, and selling the house becomes an easier decision if neither person can afford to maintain it independently.
2. Children’s Needs: Couples with children should prioritize their children’s needs whenever possible. Couples may decide to continue to jointly own a house to avoid further disrupting their children’s lives. Consider school districts, location and future plans. If your children haven’t started school yet, perhaps a move closer to a better school district would be beneficial.
Additionally, consider whether it would be better for the children emotionally to begin life in a new situation, or to try to limit changes. Many people decide to use the home as an anchor or stability for their children, but each situation is different.
Many divorcing couples that have a mortgage together (joint mortgage) choose to sort out the mortgage so that only one partner has their name on it. The benefits to this are that the person who stays in the house does not have to rely on their former partner for the mortgage.
Secondly, the person removing their name from the mortgage will be able to borrow more for a new home without their name on the mortgage of the house the couple had together. Lastly, removing one person’s name from the mortgage may help break the link that ties your credit together, since it removes joint debt. When people have joint-debt, it allows one person’s debt to affect the other person’s credit.
As mentioned above, income requirements will help determine ultimately what makes the most sense regarding the future of the house. If you are considering owning the home independently of your former spouse, start by talking to a mortgage lender, who can tell you exactly what you can afford. If you cannot afford the house on your own, you may be able to get a “guarantor mortgage”, where a relative agrees to make the mortgage payments if you can’t.
How JR Berger Properties Home Buyers Can Help
If you and your spouse have tried to break up the mortgage and are unable to come to an agreement, JR Berger Properites can help. We often buy houses from people looking to move forward as soon as possible with fewer communication and negotiations than a traditional sale. For a free, no obligation quote on your house, call us!
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