Featured News 2015 Should You Keep Your House in the Divorce?

Should You Keep Your House in the Divorce?

It used to be considered an achievement to get the house in a divorce settlement, however, that was back before the real estate market took a nosedive.

Instead of sitting on a nice investment, and feeling like they ran off with the "prize," many spouses are stuck with a house that has negative equity and can't be sold or refinanced. Not only that, but many divorcing individuals simply can't afford to maintain a mortgage that took two incomes to pay, especially when they are upside-down on their home loan.

Before the real estate collapse, the house often represented most of the equity in a marriage. These days, spouses are struggling over what to do with the house, and many times the house is more of a "hot potato" than a valuable asset.

What's your house situation?

Should you keep the house in your divorce? It depends. Here are some questions that you should ask yourself:

  • Can I afford the mortgage payments?
  • Can I afford maintenance?
  • How much do we owe on the house?
  • How much is the house worth?
  • Is there any equity?
  • Can I refinance the house in my name alone?
  • Will a bank even loan me the money?
  • Are there enough marital assets to by my spouse out of the house?
  • Can we trade another asset in place of cash?

Just before the Great Recession, lots of people retained the marital home with equity in a divorce in exchange for an investment or retirement account, thinking it was a fair trade. But, when the market crashed, they wound up upside-down and without a brokerage or retirement account.

If you're thinking about keeping the house in your divorce, you should speak with a family law attorney who can offer you knowledgeable advice on this subject.

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