There are many decisions that you need to make when considering divorce, and among the biggest is whether you should keep the marital residence. There are many emotional reasons that will influence you to do so, including:

  • You have lived in the house for a long time and have many fond memories.
  • The children have friends close by, and they have attended a school district that you and they enjoy.
  • Some of your neighbors have become close friends.

These are good reasons, but holding on to your home may present financial issues that can become big problems. The wise thing to do would be to seek a mortgage in your own name, but that probably means a new and higher interest rate. Can you afford it?

You will be tempted to retain the existing mortgage with both of your names on it, but relationships change and you and your spouse could become legally exposed to each other. Is your ability to continue to be financially responsible for the entire mortgage based on expected spousal support? If so, what if your ex loses a job? Are you going to be able to pay the mortgage along with ever-increasing property and school taxes? Will it be affordable when you are able to retire?

Downsizing offers some interesting possibilities. First, your day-to-day cost of living will be reduced. Next, with the money you receive as your share of equity from the sale of your home, you can invest it and perhaps be able to double it within ten years. 

These are issues to consider during mediation. We recommend that you take the time to meet with a financial advisor before you make a final decision about what to do with the marital residence.

Contact Jerry to see if he can help you with your separation or divorce.