This four-part article series poses a series of questions to help people going through divorce decide whether it is in their best financial interests to keep the house or to sell it and split the money.
Welcome to the second installment of this four-part article series on whether it’s a good or bad idea to keep the house post-divorce. The answer to this exigent question, of course, varies from person to person and depends on a suite of variables. In Part 1, the first important question financial planners in Del Mar tend to urge divorcing Del Mar residents to consider is what their home meant to them and why it is they would want to hold on to it. Could the benefits and advantages of staying there be found elsewhere? Was the decision made emotionally or because the home really is practical and safe, in a good neighborhood, close to good schools? etc.
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Now let’s take a look at the next important question anyone going through a divorce should ask themselves when considering whether or not to keep the home.
“Should I Keep the House?”
Question # 2: How Long Do You Plan on Staying if You Keep Your Home?
Do you plan on living there indefinitely? Do you wish to leave your family home to your children? Or do you just want to stay there until your kids have finished school and have moved out?
Not surprisingly, how long you plan to stay in your home after divorce can really have a big and important impact upon your decision to keep it or not, according to many Del Mar financial advisors. Many people go through the trouble of refinancing the mortgage after a divorce, which is a very costly process, only to end up moving out once they’ve met someone new perhaps a few years down the line. Selling the house is another issue entirely! You’ve got to get it into sellable condition and then pay real estate agent’s commission and taxes, so ask yourself whether this is all worth it given the period of time you wish to stay there.
While it’s not possible to predict with any certainty what may happen in the future, you can at least decide how long it is you’d like to stay in the home and under what circumstances you’d be tempted to sell. Keeping the house for only a few years and then selling it could see you losing money to the afore-mentioned costs. However, keeping the house for a longer time – perhaps 10 years or more - allows the price to appreciate above the costs of upkeep, taxes and resale, which negates any losses you might incur.
If you don’t want to get involved in any of this from the outset, then liquidating your home during in the process of divorce and splitting it down the middle might be the best bet for you and your ex.
Stay Tuned for Part 3
Stay tuned for the third installment of this four-part article series to read more financial planning advice on whether Del Mar residents going through divorce should hold on to the house or not. In Part 3, we’ll examine advice surrounding the following two questions:
Does it make sense to continue to own the home jointly with your ex?
If you keep the home, what assets will you have to sacrifice?
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