Should I Keep the House or Not? Financial Planning Advice for Del Mar Residents Going Through Divorce, PART 3

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 third installment of this four-part article series on whether it's a good or bad idea for you to keep the house post-divorce. In Part 1 and 2, we discussed the following questions in order to help Del Mar residents make better financial decisions and plans when deciding who should keep the house.

• What does your house mean to you? Could sentimentality be coming between you and the best financial and emotional decision for you and perhaps your kids?
• How long do you plan on staying in your house after divorce? If it's only for a short time, selling up while you're still processing the divorce might be the best decision as it saves you money on refinancing, upkeep and selling.

Let's continue with the next two important questions you should be asking yourself if you're considering keeping the house post-divorce.

"Should I Keep the House?"

Question # 3: Does it Make Sense to Continue to Own the Home Jointly With Your Ex?

Another option is to hold on to your home and continue to own it jointly with your ex. This often works out very favorably with more amicable divorces, according to many Del Mar financial planners. Doing it this way saves money on refinancing your home to get your ex's name off the mortgage. Additionally, you won't have to trade any of your own assets for his or her equity, such as your retirement fund. You simply continue to own the house together, paying the same mortgage and sharing in the costs of upkeep. When you do decide to sell, you split the costs of the sale down the middle, as well as the value of the house and its appreciation.

"Should I Keep the House?"

Question # 4: If You Keep the Home, What Assets will You Have to Sacrifice?

If you want to keep the house, you're looking at trading some of your valuable assets to compensate for your ex's equity. It's at this juncture that many Del Mar residents make the potentially poor decision of trading their retirement assets for their ex's half of the home. What you need to decide is whether you can replace those assets before you reach retirement, otherwise you may find yourself in a financial pinch, even though you have held on to the house.

Divorce can hit retirement plans especially hard, because you're essentially splitting your retirement funds in half. Also, it can be hard to focus on the future when the present is so tumultuous. What you should ask yourself at this time is whether you can afford to give up your savings and retirement provisions to keep the house. Speak to your financial advisor or retirement planner about this. If you can't, you'll only end up having to sell the house when your already exhausted funds run dry. You may only be postponing reality by keeping the house.

Stay Tuned for Part 4

Stay tuned for the final installment of this four-part article series to read more about asset management in Del Mar like financial advice on whether Del Mar residents going through divorce should hold on to the house or not.

In Part 4, we'll provide a recap of the questions explored thus far, before taking a look at these final two:

• Can you afford to keep the house and pay its mortgage?
• Do you understand the tax consequences of keeping the house?