What to do with the Marital home.

       
In many divorces one of the biggest questions is what to do with the marital home. Does the wife get it? the husband? or should the home be sold and both parties split the proceeds equitably? Before answering this question there are bigger questions to be asked, is the home underwater, meaning is the house worth less than what you bought it for? Do either of you make enough money to buy out the other? and if so will you be struggling to make ends meet to pay the expenses of home ownership and your other financial obligations? You may want the home but not have the means to do so, which means you may have to let it go, which, at times, is a hard thing to do.
It seems more women than men prioritize keeping the family home for the sake of the children. You may want to maintain as much as possible what the children already know and are used to. As noble as this sentiment may be, if you are co-owners of the property, the other owner would have to agree to the scenario of keeping the family home. Depending on their financial situation it may be an easy response or a hard thing for you to hear. If the other party has support and alimony to pay selling is the easiest response, especially if they don't get to live in the home until the children reach adulthood.
Some parties are able to reach amicable agreements to retain joint ownership and one party remain in the home with the children. They then agree to postpone final division of assets until the children reach majority and at that point the house is sold. Sometimes the ex who does not have residency of the family home has access to their share of the equity in the home so they are able to potentially buy their own separate property while they wait for the sale. In this scenario the children, if there are any, are the true winners.


Make sure you have an agreement that drafts the terms of postponing the sale of the marital home. Some fathers/mothers just want the cash and split the proceeds while others will sacrifice their financial well-being for the sake of the children. You would both have to negotiate who  remains in the home with the children, who pays the mortgage and taxes to get credit for the reduction of principal on the mortgage from the date of the divorce until the date the home is sold. If renting a similar property is similar to the mortgage payment then the person who stays in the property gets no credit for reducing the principal since he/she is enjoying the benefits of living in the home. You would both discuss the expenses associated with the property as it occurs or when the house is sold if the person who remained at the property paid for repairs while they were residents.
Emotions can run high as to who gets the marital home but be sure that it works for you financially and you don't overextend yourself for something that worked when you were with someone helping pay the bills. You should not give up other financial securities such as pensions and savings accounts to save the home yet leave you with no recourse to keep the home past the buyout. As well as being a divorce coach I am also a real estate broker and we would sit down and discuss the value of the property before you speak with a Certified Divorce Financial Analyst to see what the picture would look like if you kept the family home. The decision you make should not be one of impulse but one that is concrete and makes financial sense.
If you decide that you want and can afford the family home, and you and your spouse took out a mortgage on your home together, the only way to get your spouse's name off the mortgage is to refinance. Most, if not all, banks and  mortgage companies won't just take your spouse's name off the mortgage, which means you'll have to refinance. Depending on your current interest rate verses the one you'll get it could be a better or worse situation for you. Meaning, your current interest rate could be lower than what you will end up paying if you refinance today. If you cannot refinance for whatever reason, another option is to keep your spouse on the loan. This comes with its own set of problems because if you are the one not keeping the home but your name is still on the mortgage you are still liable if the other does not pay on time. It could have a dramatic impact on your credit score and your credit if the one party who is supposed to pay fails to meet their obligations. This is not a recommended scenario but there are parties out there who have done this successfully. Typically, if a refinance is impossible then the only option is to sell the property.
Some banks will allow an assumption of the loan (same loan and same terms) but you will still have to qualify for that loan. The bank will run your credit, check your bank statements and qualify you the same as if it was just a refinance to verify that you can afford the payments on your own. If the interest rate is lower on your existing loan than current interest rates, this might be an optimal solution depending on the terms of the loan. If you have private mortgage insurance on the old loan and you can qualify on a new loan without it, it sometimes is worth the effort to refinance rather than assume a loan. You don't want to assume a loan with bad terms if you can qualify for a loan which will benefit you and your family over the long term.
It is never an easy decision to detach yourself from something that you worked so hard to attain. You feel as if you lost your marriage and to lose your home is the final nail in the coffin. Yet, sometimes putting the past firmly behind you and not having the shadows of a former love pass through the hallways and rooms of the home that you both shared is sometimes the best choice. If you can stand it and you can manage it financially then it is definitely something to consider, if not then sometimes letting go and patiently waiting for the next chapter of your life to begin might be the better option. The next chapter isn't necessarily going to be worse than the chapter you are in because the choice is always yours to design your life the way you choose.
Don't allow the myth of keeping the family home hold you financially hostage. If you can do it, go for it, if you cannot take a deep breath and let it go. Through divorce coaching we will delve into your emotional attachment to the family home, and provide you with guidance as to the best long term scenario for your situation.