While a home may have sentimental value, it can leave people "house poor"
For people who are going through a divorce, one of the first concerns they will have is deciding who gets to hold on to the marital home. Not only is a couple's home likely to be their biggest asset, but it also tends to have a lot more emotion attached to it than the rest of a couple's estate. As Forbes recently reported, many people go into a divorce thinking that the only way they can "win" their divorce is by holding on to the house. However, while the house may represent a considerable asset, people need to think very carefully about giving up too much just for the sake of laying claim to the couple's home.
A house for two
The first thing to consider is that a marital home, by definition, is built for at least two people (or more, if the couple has children). Prior to the divorce, both spouses may have had an income and may have contributed to paying the mortgage, property taxes, maintenance fees, and other home expenses. Trying to cope with the same expenses on a single income can prove difficult.
As USA Today points out, those high expenses can leave the person who has held onto the house feeling "house poor." Although he or she may have considerably assets in the form of residential property, because those assets are not liquid they essentially leave the person struggling to cope with more everyday expenses, like groceries and gas.
As Forbes point out, the expense of keeping a home is only one consideration in deciding who gets the house. Because the ex-spouse will likely want his or her name off of the mortgage, refinancing a mortgage is likely to be a required step to holding onto the house. On a single income, however, the requirements for refinancing change considerably and people may soon find that the terms they were offered as a married couple are considerably worse as a single person.
Finally, many people justify holding out for the home by saying they will simply resell the house at a higher price. In some hot real estate areas such an approach may make sense, but property prices are notoriously volatile and there is no guarantee that they will remain on an upward trajectory for a given area. Furthermore, when reselling the house the seller may end up having to pay capital gains tax.
As the above story shows, divorce requires people to make many major decisions, many of which will have implications for years to come. Because every divorce is unique, it is important to carefully consider all options before deciding what to do when faced with such challenges.
An experienced family law attorney can provide invaluable assistance to anybody going through a divorce. Backed up by years of experience and knowledge, such an attorney can help clients understand what options they have before them when dealing with the legal and financial fallout of a divorce.