If you are getting divorced, there are many potential reasons why you would want to keep the house. Perhaps you have children, and you want them to have a stable living situation. Maybe you understand how competitive the modern housing market is, so a home is a major asset to consider.
While the desire to keep the house is understandable, it is important to carefully consider if it will be affordable. This is part of the reason why it is so helpful to make a post-divorce budget.
Your standard of living will likely decline
One thing to keep in mind is that your overall income will decline when you get divorced, as will your standard of living. Even if you and your spouse both work, many of the costs that you used to share – like a mortgage or utility payments – will now be your responsibility alone.
Exactly how your income changes after divorce depends on many factors, such as spousal support or child support. But your post-divorce budget can help you determine whether the same home is still affordable on one income, the way that it was on two.
Refinancing your mortgage
Another thing to consider is the potential need to refinance your mortgage, even if you get to keep the house during property division. Anyone on the mortgage is responsible for payments, so your spouse would likely want you to refinance into your own name. But since you are now on one income with a higher percentage of financial obligations, it may be more difficult to qualify for a mortgage.
This does not apply if your house is paid off, of course, where all you have to consider are ongoing payments like utilities, property taxes and maintenance and upkeep costs.
Planning for the future
Everyone’s situation is unique when it comes to property division and their post-divorce budget. Just be sure you know what options you have and what legal steps to take at this time.