What to Do with the Family Home?
One of the most traumatic aspects of a divorce is deciding what to do with the family home. This would once have been a place filled with laughter and joy and would have provided you with a sense of security but now it simply becomes a financial asset which has to be dealt with and can be one of the most difficult things to deal with on top of all the other issues surrounding a marriage break-up.
There are several options that you may wish to consider in deciding what to do with the marital home.
One Person Remains in the HomeWho gets to stay in the house will depend on the mortgage and if it is in single or joint names and whether or not the person who intends to stay in the home can afford to pay the mortgage on their own. If the house is in joint names then it is up to one partner to buy out the equity of the other. However, this will mean higher mortgage repayments so it’s only an option if the person staying can afford to do this. There are a number of lenders who specialise in refinancing a mortgage in divorce cases but it’s also necessary to incorporate costs into the financial equation as the house will need an updated valuation so there will be new title deeds and survey costs with the associated legal fees which accompany that.
The benefit of one person remaining in the home is that there will be less upheaval in terms of having to move out and to try to arrange another buyer. This option is often the preferred choice if you have children as it is less disruptive to them. It will also make it easier for the person staying to keep in touch with friends, get to work just as easily and allows any children to stay in their own school.
The disadvantage, however, is that the home might be too expensive for you to run on your own and maybe too big and difficult to manage. It will also hold many memories both good and bad which will make it more difficult to move on with your life. And, if your ex has been violent towards you in the past, it may not be a safe option as they will know where you live.
Selling the Home and Splitting the ProceedsIn many cases, it’s simply not financially viable for either partner to stay in the marital home and, of course, neither of them may want to do that anyway, so the easiest option then is to sell the home, split any profits once the outstanding mortgage has been paid and then both move on. The main advantage is that everybody has a clean break and can simply pick up their lives elsewhere. However, one of the problems which particularly affects those who have not built up sufficient equity in the time since they bought the house often means that they’re unable to finance a new sole mortgage and may have to look for rented accommodation. Also, the proceeds from the sale of a property may not necessarily mean that it’s divided 50-50. If no agreement can be met, you’ll need to seek legal advice and there are numerous factors which can go towards one partner receiving a greater share of the proceeds of the house sale than the other so you should have all the legal facts to hand before working out if this is a viable solution for you. However, in many cases, it is the only option left available.
Keeping Things as They are for the Sake of the ChildrenDepending on the state of the finances of the person moving out and their willingness to co-operate with their ex, another option would be to consider maintaining the status quo with regards to ownership of the property and move out whilst letting your ex remain in the marital home with the children. Divorce can be very traumatic for children too, especially younger ones, so it may be worth exploring this option if you don’t wish to cause any more upset to the children. Usually, it’s only a temporary arrangement until the children are older or until the person staying behind either decides to move on or is eventually able to buy the other person out.
It’s not an easy option as the person moving out will have to still keep paying their share of the mortgage (or financially contributing to the mortgage in some way) and will also need to find sufficient money for their own accommodation needs. However, whilst this is an honourable option to take, providing it’s financially possible, it can place the person moving out at risk as they could also be liable for any debts or judgements which are taken out against any joint ownership agreement, even after they have moved out.
Another option is to sell the property and for one of you to rent it back whilst the other moves out. This allows you to get cash which is tied up in the equity and gives you some breathing space to plan your next moves whilst you rent the property for as long as you need to. A further option would be to both remain in the property but live separate lives until the time is right for one or both of you to move out. Neither are ideal solutions for the long term but may be the only viable options you have in the short-term until you’re able to consider other options.
If no agreement on the house can be reached, however, the most important thing you should both do is to seek legal advice in order to try to find the most suitable solution.