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Should the marital home be sold in divorce?

Going through a divorce is an emotional rollercoaster. Many couples with children want to give their kids some stability during this difficult time and see keeping the family home as a key way to do that.

By staying, the children can keep going to the same school and maintain the same friendships.

However, in most cases, the family home also is a couple’s largest asset. So, several factors play into whether keeping the marital home is the best financial decision.

Some of those include the following:

Can you qualify for the mortgage on your own?

If you’ve been a stay-at-home mom or have not been working full time, you may not. Lenders will be evaluating your income alone when you divorce, and it may not be enough. You also may not have a great credit rating if you haven’t worked in years.

Looking into refinancing your mortgage is a good idea—you could be eligible to lower the payments and get a new loan based solely on your income. You also may have enough equity in the house to buy your partner out of their share.

Can you afford the costs of home ownership?

Owning a home isn’t just about paying a mortgage. You also must pay for home repairs and upkeep. Those can quickly add up. Don’t forget to budget for homeowners’ insurance, property taxes and the utility bills too.

Tax implications

Selling a home that has significantly appreciated in value can impact your taxes. If your home has gained more than $250,000 value, you could have to pay a capital gains tax if you sell it. Consult with a financial adviser to better understand what taxes you may incur if you sell the home. Also know that you can write off mortgage interests and property taxes, lowering your tax burden.

New lifestyle

Maybe you hate the idea of trying to keep up with your home’s yardwork and maintenance. Maybe you’d rather just start fresh by downsizing and trying townhome living for a while. If you can’t financially afford to keep the marital home, start thinking of ways to embrace a less-is-more lifestyle as you move forward. You never know—you could find yourself happier without living in a big house on your own.

Before making any of these decisions, consult an experienced divorce attorney. They can help you get a better idea of how your assets might be divided in a divorce.

No matter which choice you make, your marital home will have sentimental value for you and your children. Selling it never will be easy, but it may be necessary to build a post-divorce life.

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