If I Want to Keep My Home in The Divorce, Where Do I Start in Figuring Out How?
As we have previously discussed, when it comes to divorce, whether or not you should keep the family home is one of the most important asset-related decisions that you will make. On the one hand, your home likely holds sentimental value, and it may be important to your children. However, on the other hand, we caution our clients to hold onto an asset that is simply too expensive to sustain, leaving them “house-poor.”
That being said, if you have decided that keeping your home after the divorce is in your best interest, we have discussed how you go about doing so below:
Figuring Out Cost
First and foremost, even if your spouse has indicated that they would be interested in you purchasing the house from them, proving to them that you can actually afford it and agreeing on what its fair value is can often be a challenge. You want to work with your attorney to figure out this amount. Typically, the procedure involves coming up with the total amount of equity that you both share in the property by subtracting what is owed from the house’s agreed-upon value. You then divide that amount in half to come up with each spouse’s share.
Still, keep in mind that there are additional factors that can and will affect the amount and this still doesn’t help you decide on other important issues, such as who will be responsible for loan fees, paying off certain debts, any tax obligations resulting from the title transfer, etc. Keep in mind that these amounts can add up.
Figuring Out Where The Money Will Come From
In addition, you will want to figure out what the best way to come up with the money is. Most people cannot come up with the amount that is necessary to buy the home from their spouse simply by selling their belongings and cashing in investments. As a result, one of the most common options involves giving your spouse another marital asset in exchange for ‘their half,’ such as a retirement account that would otherwise be yours. Other options include interest in another property or valuable belongings, such as jewelry. Yet another option is to borrow the money from the bank by refinancing or adding a home-equity line of credit – just know that with certain size loans, there is going to be long-term interest obligations and you will need to get pre approved.
Keep in mind that another option is to take out what is known as a home equity line of credit as a second mortgage. These are revolving accounts and they have interest-only payment features, which keeps your monthly payments down. However, they also have higher (and variable) interest rates compared to your first mortgage and limited interest deductibility.
And if all of this sounds too risky for you, some people are fortunate enough to be able to rely on family and friends to help them make up the difference and keep their home.
Contact Our Florida Family Law Attorneys To Figure Out The Best Course Of Action
Also remember that if none of these options are realistic, it truly may be a better financial decision for you to not keep the home especially if it will burden you financially and make it more difficult for you to start your new life. Regardless, our Orlando divorce attorneys are here for you; contact us at the Arwani Law Firm, PLLC today for a free consultation.