27 Jul Is it better to keep or sell the marital home during divorce?
The end of a marriage is a lot more than just two people parting and moving on with their lives. If there are minor children, there are custody and child support decisions.
There are other financial considerations as well, especially how the couple’s property, assets and debts will be divided. For many Long Beach residents, the single biggest piece of property and financial asset they have is the marital home. Deciding what to do with it often causes both spouses to face some tough questions that force them to weigh their emotional connection with a house against their need for financial solvency at the end of their marriage.
Although the feeling is common that whoever gets the marital home in a divorce settlement has won, in reality anyone who is considering taking the marital home in a divorce should answer four big questions to his or her satisfaction.
First, is refinancing the mortgage possible? The ex-spouse who does not get the house will want to be struck off the mortgage. This means one person will make an entire mortgage payment each month.
Second, will the person be able to maintain the property? Larger and older houses are more expensive to maintain and require ongoing payments for insurance, property taxes, maintenance and furnishings. Expenses only increase with time.
Third, will the value of the property increase in the years to come? The answer to this usually depends on the housing market in the area. Projecting property values several years out can help determine how easy it will be to sell the house in the future.
Fourth, what are the tax liabilities for both keeping and selling the house? Keeping the house means paying property taxes but also deducting interest on federal taxes. Selling at a profit means paying both state and federal capital gains taxes.