Real estate is one of the trickiest things to deal with in a divorce. One of the main reasons for this is that your contract for a loan on property is something the court cannot undo.
In addition, another problem is not understanding how divorce will impact your finances. You may decide to keep your home but discover after the divorce that you cannot afford it anymore. U.S. News and World Report explains that not recognizing the legal aspects of real estate ownership and legal responsibility can leave you in a bad place after a divorce.
Dealing with the mortgage
You will need to make sure you figure out how to handle your mortgage after the divorce. If you decide to maintain joint ownership, then you will not need to do anything. However, if one of you wants to keep the home, then you will need to make changes to your mortgage.
The main option is for the person who wants to keep the home to refinance the mortgage on the home in his or her name only. Typically, if you were the one keeping the home, you would need to buy out your spouse’s share.
This is often not financially possible, which leaves you with the option of giving up other assets in the divorce to make up for half of the cost of the home.
Before you do anything with the family home, you need to make sure you can afford it. Giving up assets or paying money to your spouse may not be feasible. It could leave you in a bad financial position. It may even impact your ability to refinance the mortgage.
Furthermore, if you are going to give up assets or money to keep your home, then you need to make sure you will be able to afford it after the divorce. Make sure it makes financial sense for you to afford the upkeep and other costs associated with affording your home.