The marital home is often one of the most valuable assets in a marriage. Making the right decision about the home after divorce is sometimes the most difficult decision that you must make.
First, the family home is often a source of security and stability, particularly for the economically dependent spouse. It may have strong emotional ties – in the way it is decorated, for the memories it evokes, in the comfort it provides. These aspects cannot be given a price tag but they often become a major factor affecting a divorcing spouse’s decision with respect to the home.
In addition, the marital home carries important economic attributes, and your decision as to whether to keep your house after divorce must be carefully assessed, both in terms of available cash flow and in terms of potential cash upon sale. The cash flow must be analyzed in order to determine the monthly “cost” of the house, and whether it makes economic sense to continue to live in it. Evaluating the option of selling the house gives a measure of what the house can be translated into if the proceeds from the sale (after paying off the mortgage and costs of sale) are reinvested.
A careful balancing of both your priorities and of the economic realities of your situation must be undertaken in order to decide whether you should continue to own the house after the divorce.
With regard to your emotional attachment to the house, try to separate out your own attachment and that of your children. Very often divorcing spouses feel compelled to keep the house for the sake of their children so as not to “uproot” them from their school, community, and friends. Unfortunately, this reasoning – although understandable – can lead to financially imprudent decisions. In considering your options, you should keep in mind that children are much more resilient than we sometimes think, and experts agree that people are more important to children than places. So, it is psychologically more beneficial for your child to know that her parent is financially secure than to see a parent constantly worried about not being able to afford the next mortgage payment on the house.
As to your own attachment, allow for the fact that what seems like an essential when you are first adjusting to the reality of a separation may change over the following months to become a much lower priority.
Turning then to the financial aspects of the house, it is important to gather all of the relevant information so as to be able to do an economic analysis of the pros and cons of keeping the house. How affordable are all of the payments in connection with the house when compared to your overall income, both your own income and support from your spouse? And will you be able to afford the payments long-term, after support from your spouse terminates? The experts tell us that no more than 25-28% of your monthly income should be used to pay the housing expenses. And if you would have to go beyond that percentage, what items on your budget are you prepared to give up in order to do so?
Finally, consider various options with regard to timing as you weigh these questions. You might plan to stay in the marital home for a year or two in order to establish a period of transition and stabilization for yourself and your children, but then be prepared to sell the house at the end of that period. Or you might want to stay in the house until your 15-year-old graduates from high school. Instead of doing an “all-or-nothing” calculation, think about different time frames to reconcile your various priorities.