In many divorces, one of the spouses wants to keep the house and buy out their spouse's share. Usually, people want to do this because keeping the family home provides stability, it keeps the children in their school and with their friends, and they believe that otherwise they can't afford to live in a similar house in the same neighborhood.
However, many times the divorcing spouse fails to look at the long-term consequences of keeping the home. They forget about property taxes, dips in the real estate market, qualifying for a mortgage in their own name, and how paying the mortgage may affect their funds for retirement.
If you're considering keeping the family home, these costs should be considered before you try and keep the house. Additionally, here are some questions to ask yourself:
- Can I qualify for a mortgage in my own name?
- How much do we owe on the property?
- How much is the house worth?
- Is there any equity?
- Can I afford to pay for major repairs?
- Can I agree on a buyout amount with my spouse?
If you decide that you do want to keep the home, and you and your spouse can agree to a buyout amount, then next you're going to have to deal with the current mortgage. Typically, this means that you'll have to refinance the mortgage in your name alone.
On the other hand, if you and your spouse can't agree on a buyout amount, or how much each of you should receive from the sales proceeds, you'll likely be headed for court, where a judge will decide based on Pennsylvania's principles of "equitable distribution."
Under Pennsylvania's laws of equitable distribution, it doesn't necessarily mean that everything is split 50/50 down the middle.
Each Divorce is Unique
Should you keep the house in the divorce? The decision whether to keep or sell a house depends on a variety of factors. You should evaluate your ability to refinance the mortgage in your name, and whether there's enough equity in your property to refinance or sell it.
If you cannot get a loan, or if you cannot afford the housing expenses, it may be best to sell the house and downsize into something more affordable. Take your time before deciding and speak with your divorce lawyer, accountant, and financial planner so you can make an informed decision.
Searching for a Pennsylvania no fault divorce lawyer? Contact Cairns Law Offices for a free consultation!