When a marriage comes to an end, many individuals in Missouri and elsewhere around the nation think that keeping the family home is an ultimate goal in a settlement agreement. However, financial advisors warn that maintaining that home may not always be the wisest strategy following a divorce. They offer several important options to consider when determining how best to proceed with division of assets.
Many couples believe that selling the house and dividing the assets is the least complicated path to take. However, there are many issues to address, such as deciding on a realtor, determining an asking price for the house or deciding how mortgage payments should be split pending the sale. Selling a home can also have a significant impact on a person’s taxes. Therefore, depending on the cost of the home, taxable income could increase significantly.
For those who want to keep the home, experts stress that they consider how house payments and maintenance factor into their new budget. Those once in a two-income household now faced with one income stream would no longer have the same funds to devote to a mortgage. If keeping the home, the first step is likely to buy out one’s former spouse. This usually means refinancing the existing loan, if any, often with hopes of lowering the monthly payment.
Re-amortizing the loan may be another option for some to consider. Applying a large lump sum payment will reduce the balance, allowing for a reduction in the ongoing payments. Those most couples want a clean financial break, some may decide to continue making the mortgage payments together if refinancing or re-amortization is not possible. Any stipulations regarding this joint arrangement should be carefully detailed in a divorce agreement.
Deciding the status of a family home is just one issue to address during a divorce. It is important to have an experienced ally acting in one’s best interest throughout this process. A knowledgeable Missouri attorney will provide much-needed guidance to clients and work toward achieving the best outcome possible in their divorce proceedings.
