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Can you afford to keep your house? Should you sell? Downsize? These are some key questions that may be going through your mind as you try to determine what to do with the family home during a divorce. A variety of factors must be considered in order to determine what is best in your particular situation.
If you would like to keep your current house, we can discuss how you can buy-out your spouse and refinance your mortgage into your own name. After years of working with divorcing people, we know how critical your post-divorce finances will be for your long-term financial health. We can help you make financially sound decisions and even help you save money during the process.
Can you afford to keep your house?
A number of variables need to be considered when determining the answer to this question. First, consider all your sources of income and all your other financial obligations outside of anything associated with the house.
Next, consider the monthly mortgage expense. Add to this all the monthly expenses associated with the home: taxes, homeowner’s insurance, HOA fees, utilities, and other items such as lawn care or snow removal. In addition to being able to afford these expenses, you will also need sufficient assets or cash flow to cover unexpected bills, such as repairs and new appliances. All these factors must be considered when determining whether or not you can afford to keep the house.
If you keep the house, do you have the funds to buy-out your spouse? In addition, you will likely need to refinance the mortgage into your own name. There are many requirements that lenders have that you and many loan officers and mortgage brokers who don’t specialize in divorce may not be aware of, such as the stipulation that alimony and child support payments must have been consistently received for the last 6 months and must continue for at least 3 years after the date of your mortgage application or the signing of the note to be considered qualified income. If that’s not the case, you might very well be rejected for lack of sufficient income.
If you are the one paying alimony and child support, it will be considered an ongoing monthly expense that could cause your expenses to be too high in relation to your income, possibly disqualifying you for a new mortgage or refinancing.
There are many other requirements that are specific to divorce and we can help you deal with all of them through our nationwide network of mortgage brokers who are trained and experienced in working with divorcing/divorced people.
And if your home is in Florida, we can help you directly through our sister company, Next Act Mortgages, LLC (NMLS #2123503).
Should you sell? What if you still want the house?
If you determine the costs of keeping the house are too high and/or you’re unable to buy-out your spouse and refinance the mortgage, you may not have a choice but to sell to a third party or to utilize our unique Sale/Leaseback Program.
If one of you really wants to keep the home and cannot afford to buy-out the other and refinance the mortgage, then our Sale/Leaseback Program might be the perfect solution for you.
When we purchase your home for cash and lease it back to you, you free up the cash you need to start your new life and pay your bills while staying in the house that you love. We provide flexible leasing terms, and you have the option to buy the home back at a later date.
Should you want or need to sell the house, our sister company, Next Act Realty, LLC, can help you sell your house through our nationwide network of divorce real estate experts. We have done the research and have vetted a team of expert agents across the country. These agents have specialized training in the unique financial, legal, and tax aspects of selling real estate in the context of divorce and have many years of experience helping divorcing couples sell their marital homes. Contact us today to see how we can help you.
Related: Understanding Real Estate Appraisals for Divorcing Couples