5 Things I Wish People Knew About Keeping the House In A Divorce

So often I talk with people about selling or buying a house a few years afterwards and I wish I could go back in time and share this advice. 

  1. If one party is keeping the house and it has a mortgage, refinance the debt. That way the person who owns the house has the mortgage. This is the biggest deal for the person not keeping the house. The lender doesn’t care about divorce decrees or quit claim deeds. They look at who signed for the mortgage. Without doing this the person who no longer has title to the house has the debt on their credit and any future delinquincies are theirs too. This may throw off their debt to income ratio for years until the other party decides to sell the house, and it could affect their credit for longer.
  2. If you aren’t selling the house get it appraised. A website where you type in your address and the number of bedrooms and bathrooms is not the same as an experienced appraiser.
  3. If one party is keeping the house get it inspected. Subtract the cost of those repairs from the value or even better get all the repairs completed. If you’re keeping the house you’ll either need everything working or you’ll need to make repairs for a new buyer in the future.
  4. If you can’t afford to catch the house up on maintenance and your lender says you aren’t qualified to refinance then that means you can’t afford to keep the house. Divorce can cripple your finances already but keeping a house you can’t afford will make it worse.
  5. Sell the house if possible. It’s better to divide the money from an actual sale than to divide imaginary value inequitably because it was inaccurate. People often want to keep the house so that their kids don’t suffer another loss. Real talk from someone whose parents divorced: keeping the house doesn’t lessen the loss.

Divorce sucks, and so often people going through it don’t tell their friends until afterwards. That means I never know who needs this advice. I hope it’s helpful.

Also, I’m not an attorney, accountant, or mental health professional. You need all three when you’re going through a divorce.

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