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Divorce is a tough situation which opens up many emotional and financial issues to be solved. So what will you do with the house? In the midst of the heavy emotional and financial turmoil, what you need most is some non-emotional, straightforward and specific answers. Once you know how divorce affects your home, your mortgage and taxes, the critical decisions are easier.
 
You have 4 basic housing options when you’re in a middle of divorce. It’s important for you to understand the financial implications of each of these scenarios.
 

1. Sell the house now and divide up the proceeds.

Your primary consideration under these circumstances is to maximize the selling price. Note that the split may not be 50/50 but rather may depend on the divorce settlement, the source of the original down payment, and the legislative property laws in your area.

2. Buy out your spouse.

If you want to keep the house, you’ll have to determine how you’ll continue to meet your monthly financial obligations. If you used two incomes to qualify for the old loan, refinancing on your own might be a little difficult.

3. Have your spouse buy you out.

If you’re leaving, you have the opportunity to start again in new surroundings with cash in your pocket. However, you should be aware that if the old home loan is not refinanced, most lenders will consider both you and your spouse as original co-signers to be liable for the mortgage. This liability will make it a little difficult for you to qualify for a new mortgage if you decide to purchase a home even though you won’t have legal ownership.

4. Retain your ownership.

Some divorcing couples postpone financial decisions with respect to the home and retain joint ownership for a period of time. While this temporary situation means you have no immediate worries, in this regard your tax considerations may change from the time of your divorce to the time of the ultimate sale.
 
If you and your spouse decide to sell your home, it will be important to work together with a professional to maximize your return. Put all your differences aside and you both should be present when a listing contract is put together.
 
If you are looking to sell your home, I will be happy to help you. Call me at 647-834-9928 or send me an email to [email protected]