The Financial Limitations of Keeping the House in Your Divorce

When a spouse files for divorce in Michigan or is served with divorce papers, the emotional and financial realities of divorce usually begin to set in. Yet even when both spouses have thought carefully about the financial implications of divorce, it can be difficult to let go of the family home. There are many reasons that one of the spouses might want to keep the house in the divorce settlement or through the property division process.

For example, you might have young children from the marriage, and it might seem like it is in the children's best interests to stay in the same home rather than uprooting them to a new property that might require a change of schools and acclimating to a new neighborhood. Or, for instance, the house might have sentimental value if you raised your children in the home and have years of happy memories there.

Whatever your reasons might be for wanting to keep your house in your divorce, you might want to reconsider that decision. An article in Divorce Magazine discusses the pros and cons of keeping the house in a divorce. We have some points that can help you to think through the financial limitations of keeping your home.

You Might Not be Able to Afford the Taxes and Insurance

When you are calculating whether you can afford to stay in your home after the divorce-a house with mortgage payments that both you and your spouse likely shared from your earnings-it is important to think beyond the mortgage payment. For example, if you have a house that cost $400,000 and for which you took out a $350,000 mortgage after a $50,000 down payment, a calculator from Smart Asset suggests that the average monthly mortgage payment is likely around $1,722.

Yet this is not the only cost that you need to take into consideration. In addition to the mortgage payment, you also need to plan to pay taxes on the house, as well as homeowners' insurance. According to Smart Asset, the average monthly taxes and fees for a mortgage like the one mentioned above would total approximately $400. In addition, home insurance for such a mortgage would total around $286 per month on average. Instead of budgeting for a $1,722 monthly mortgage payment, you actually need to budget for a total monthly home cost of about $2,408. To put that number in perspective, that is an additional $686 per month beyond the mortgage payment, or an additional $8,232 per year. If you can not afford the taxes and insurance on top of the mortgage payment, keeping the house likely is not a good financial decision.

Upkeep Costs can be Extremely Steep

Unless you recently built your home and used the best materials-and even then, houses require upkeep-you will need to budget for upkeep and repair costs when you consider the overall price of keeping your house. If you were to rent a home instead of keeping the family home with a mortgage, your landlord would be responsible for upkeep costs and any necessary repairs. When you own a home, repairs can be extremely costly, and the need for them can arise without warning.

Contact a Michigan Divorce Attorney

When you are considering whether to keep the house, a Michigan divorce attorney can help you to decide whether this is the best option for you. Contact the Law Offices of Michael A. Robbins today.