Should You Keep Your Marital Home After The Divorce?
A divorce means dividing your properties and assets. For many couples, dividing their marital home becomes the biggest issue. It is their most valuable asset and neither of the two spouses wants to part with it. The primary residence has significant financial and emotional importance.
But deciding whether to keep your marital home after the divorce or not should not be decided based on emotions. Thoughtful analysis is required before you take any decision. Or else you may end up regretting your decision. Ask yourself questions from a financial point of view before deciding on keeping your marital home.
Is it possible for you to refinance the mortgage?
If you insist on keeping the house your husband or wife would surely want to have their name struck off from the mortgage (if you are paying one). If you are the only one whose name is left on the mortgage, then you will have to refinance the mortgage.
It can be quite a cumbersome process. You will be required to meet the federal standards of debt to income ratio. And sadly enough, any spousal or child support received by you will not be considered as reliable income until and unless you have been receiving them for the last 1 year.
Will you be able to own and maintain the house?
Maintaining a house is a very expensive thing. Expenses that you will have to bear include property taxes, maintenance and repair costs, homeowner’s insurance, and other related costs. The bigger the house the more the expense. Your income has to be constant and sufficient enough to be able to meet these expenses.
What is the real estate situation in California?
You need to be aware of what the housing market is like in your area. In the off chance that you eventually decide to sell it off in the future you would like to make a profit on the sale. The real estate situation is never guaranteed. So any future projections should be very helpful in taking a decision.
What taxes will you have to pay?
If you sell the house you will have to pay both state and federal taxes on the capital gains that you make from the sale. Capital gain taxes are increasing every year.
Getting divorced in California can be complicated. Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.
Do you have children from your marriage to your former spouse! If the answer is yes, then it is extremely important to maintain a civil and courthouse relationship with your…