If you’re getting a divorce and you and your spouse own a home, there is a good possibility the marital home is the most valuable asset of your marriage considering the high cost of housing in the area.
As of this writing, a modest 3-bedroom Staten Island home can run upwards of $600,000, where that same home would run about $150,000 outside of Buffalo and in many other parts of the country.
Supposing you and your spouse own a home together, you must consider what to do with the marital home. Should you keep the home? Should you rent it out and act as landlords together? Should you sell the house and split the proceeds?
Deciding what to do with the house is not a decision that should be made blindly. Since each couple’s financial and family circumstances differ, there is no “one-size-fits-all” approach to the matter.
For instance, you may have $200K of equity. Then again, you may be upside-down $50K after you remodeled the kitchen three years ago. You may both want to sell; however, market conditions may force you to hang on to it for a little while.
When a Spouse Wants to Keep the Home
Often, a spouse is emotionally attached to the marital residence and they want to keep it. However, they’re not thinking realistically. The house may seem like a much-coveted “prize,” yet it’s anything but.
Let’s say a stay-at-home mom wants to keep the marital home because her two children have always lived there. The problem is, she can’t afford the mortgage post-divorce, even with child support and spousal maintenance. If a spouse can’t afford to keep the home, it doesn’t make financial sense to hold on to it.
If you wish to keep the marital home, it’s important to determine if you can afford it. Can you qualify for a mortgage in your name alone with your current income? Can you afford the maintenance, taxes, and insurance each year?
If there’s no doubt that you can afford to keep the home in the divorce, then great. If you’re not 100% sure you can afford the home, here are some elements to consider:
- Is there equity in the home?
- Can you qualify for a mortgage in your name alone?
- Can you afford the monthly mortgage payments?
- Can you afford to maintain the home?
- Can you afford taxes and insurance?
- Would it be better to sell the house and split the proceeds?
- If you can afford the home, do you have equity or another asset that can allow you to buy your spouse out of their share?
- If you don’t have enough equity to sell, can you rent it out?
Essentially, divorcing spouses must view the marital home as a business matter, as opposed to an emotional one. The “right” decision has much to do with the current real estate market, the amount owed on the mortgage, and whether either spouse can realistically afford to keep the home.
Often, the best decision is to put the house on the market and split the proceeds from the sale. From there, the spouses move into properties that fit their post-divorce budget, even if it means downsizing into a smaller home or a condo.
Looking for a Staten Island divorce attorney? Contact Casella & Casella LLP to schedule a confidential, free consultation with a member of our legal team!