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Who should keep the marital home after a divorce?

The end of a marriage closes some of life’s doors and opens others. New York couples most often concentrate on the emotional problems and other related concerns, including spousal support, child support and other issues. An important consideration before discussing property division is the disposition of the marital home.

A couple should consider several factors before deciding to keep the marital home. The marital home is a symbol of family life and often the decision to keep it emotional, not financial. What are the factors to consider before making a decision? First, mortgage affordability after refinancing is a very important consideration. The spouse who does not keep the marital home after divorce will definitely want his or her name off the mortgage loan and his or her share of home equity. Refinancing a mortgage has some challenges for a single earner and according to federal law certain requirements of debt-to-income ratio must be met.

The second factor to consider is maintenance and up-keep of the home on one income. After all, many expenses are associated with keeping a house in good repair, functioning and protected. These considerations include paying property taxes, insurance and investing in home repairs and property maintenance. These components are costly and expenses will only increase over time. It is most prudent to think carefully and rationally before keeping the marital home at the time of divorce.

A marital residence in the New York metropolitan area can be a valuable asset but will its value be fully realized if the house must be sold after a short period of time? It is important to know the value of the housing market and if retaining the marital home at the mortgaged amount will provide a profit when sold. Also, another consideration is a residence with a lot of equity and significantly higher value may require payment of a capital gains tax when sold. So think twice before deciding to keep the marital home at the time of divorce.

Source: Forbes.com, “Four Questions To Consider Before Deciding To Keep Your Marital Home,” Jeff Landers, Feb.17, 2015

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