How Divorce Can Affect Your Home Buying & Selling Options
Divorce can cause a lot of financial stress, particularly if a couple is unsure of what to do with the marital home. Here are your options.
Divorce takes a financial toll on everyone involved, especially for those whose former spouse was the primary breadwinner. Most divorcées wish that they had been more financially independent during the marriage. Nearly half of divorcées say their credit score got worse during their marriage, especially women. Divorce impacts several areas of a couple’s lives. The family residence tends to be the most complex. Whether a couple decides to keep or sell the home, it is inevitable that living circumstances will change. The decision to sell the marital home leads to other challenges. For example, if both names are on the deed, it is jointly owned. This is why it is important to understand your buying and selling options during divorce. In many cases, only one spouse can list the property, but both parties will need to sign off on the listing agreement, contract of sale, and various closing documents. One spouse cannot sell the house without the other’s consent.
Buying and Selling Options for the Marital Home After Divorce
Some questions need to be asked and answered about the buying and selling options for the marital a couple has when they divorce: 1. How will the real estate professional be selected to sell the home? 2. Will it be a joint decision? 3. Will they both be available for showings, or will one allow the other to make the choices on their behalf? The better communication is between the two, the more efficient the sale will be. This is extremely important to those spouses who are relying on the sale of the property to acquire the funds to move on.
What if a Spouse Wants to Keep the Marital Home?
One spouse may decide to keep and remain living in the home. If that’s the case, the one remaining in the home should become the legal and sole owner of the property. They must financially qualify for the new loan in order to purchase. Removing one party’s name from the title does not remove financial responsibility of the mortgage: sole financial responsibility is only obtained with a new mortgage. With the decision made to award the marital home to one party, the other spouse may decide to buy another home. This decision can create a new host of challenges.
Divorce Can be Financially Stressful
Divorce, coupled with the strain of living on a single income, can cause high financial stress. Overspending and credit-card debt are the most common issues hurting divorcées’ credit scores. The spouse that decided to keep the home may not be able to obtain a mortgage. Financial responsibility will remain an obligation of both parties until the mortgage is changed. Without a final divorce decree, some documents may require your spouse’s signature, even if they will not be occupying the new home or if their name is not on the new title. A financial check-up is highly recommended for both parties. Make an appointment with a qualified real estate or financial professional, find out how much the home is worth in today’s market, and know your spending power.