DIVORCE What You Need To Know About Your House Your Mortgage And Taxes

DIVORCE What You Need To Know About Your House Your Mortgage And Taxes

How to Avoid Costly Housing Mistakes in the Midst of a Divorce

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Divorce is a tough situation which opens up many emotional and financial issues to be solved. One of the most important decisions is what to do about the house.


In the midst of the heavy emotional and financial turmoil, what you need most is some non-emotional, straightforward, specific answers. Once you know how a divorce affects your home, your mortgage and taxes, critical decisions are easier. Neutral, third party information can help you make logical, rather than emotional decisions.


Probably the first decision is whether you want to continue to living in the house. Will the familiar surroundings bring you comfort and emotional security, or unpleasant memories? Do you want to minimize change by staying where you are, or sell your home and move to a new place that offers a new start?


Only you can answer these questions, but there will almost certainly be some financial repercussions to your decision process. What can you afford? Can you manage the old house on your new budget? Is refinancing possible? Or is it better to sell and buy? How much house can you buy on your new budget? The purpose of this report is to help you ask the right questions so you can make informed decisions that will be right for your situation.


"Once you know how a divorce affects your home, mortgage and taxes critical decisions are easier. Neutral, third party information can help you make logical, rather than emotional decisions."


4 OPTIONS

You have 4 basic housing options when in the midst of a divorce:


l. Sell the house now and divide up the proceeds.
2. Buy out your spouse.
3. Have your spouse buy you out.
4. Retain your ownership.


It's important for you to understand the financial implications of each of these scenarios.


1 - Sell the house Now and Divide Up the Proceeds 

Your primary consideration under these circumstances is to maximize your home's selling price. We can help you avoid the common mistakes most homeowners make which compromise this outcome. As you work to get your financial affairs in order, make sure you understand what your net proceeds will be - i.e, after selling expenses, and after determining what your split of the proceeds will be. Note that the split may not be 50/50, but rather may depend on the divorce settlement, the source of the original downpayment, and the legislative property laws in your area.


2 - Buy Out Your Spouse 

If you intend to keep the house yourself, you'll have to determine how you'll continue to meet your monthly financial obligations, if you now only have one salary. If you used two incomes to qualify for the old loan, refinancing on your own might be a challenge.


3 - Have Your Spouse Buy You Out 

If you are the one who is leaving, you have the opportunity to start again in new surroundings with cash in your pocket. However, be aware that if the the old home loan is not refinanced, most lenders will consider both you and your spouse as original co-signers to be liable for the mortgage. This liability may make qualifying for a new mortgage difficult for you if you decide to purchase a home, even though you won't have legal ownership.


Deborah Boyd Headshot
Author:
Phone: 940-368-1306
Dated: August 6th 2015
Views: 1,243
About Deborah: My family has lived in North Texas for generations so I personally know the residential areas of Fri...

1 Response

  1. Michael Lee Lewis

    It is always good to get someone else's opinion and remarks on stuff. Thank You!

    Aug.07.2015

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