For many divorcing couples, their house is their largest single asset. It is also the family home, full of memories. Deciding what to do with your house can present difficult challenges. You have a few different options, and you will have to balance your financial ability against your emotions. What you should do depends on your individual situation.
As with any issue in a divorce, you and your ex will maintain more control over the outcome if you can come to an agreement. If you cannot agree on how to handle the house, a judge will make the decision for you. Here are a few factors to consider:
How did you buy the house?
Did one of you buy the house before marriage or invest a lot more than the other person? Did you buy it together? Do you still have a mortgage in both your names? Understanding how you own the house will help you figure out the right way to untangle ownership issues during your divorce. California is a community property state, meaning that most of your assets will be divided equally during a divorce.
Do you want to sell the house?
If neither of you has any interest in keeping the house after the divorce, the solution to your problem is simple. You will agree on a plan to sell the house. You may need help parsing out whether you have a mortgage to pay off from the sale, as well as closing costs and which realtor to use. The balance after the sale will likely end up divided with the other property.
Does either of you want to keep the house?
If one of you feels strongly about keeping the house after the divorce, you will have to figure out if you can afford it on your own. Not only do you need to be able to pay the mortgage on your own, but you may have to pay your spouse for his or her share of the house. Some couples agree to this by swapping out a share of another asset, like a retirement account.
Many people find that they struggle financially after a divorce, especially if they were supporting their household with two incomes. If you simply cannot afford to keep your house after the divorce, you won’t be alone. Make sure you discuss the matter with your ex, your divorce attorney and your financial planner so you can make an informed decision.