During divorce proceedings, clients often assume that their home has to be sold and many questions arise. Should you stay in your home? Can you manage the mortgage payments? Is it better to start over? Selling may seem like the logical choice, but there are other options to explore.
Consider the following:
- One person can purchase the other person’s interest in the home. With this option, you may need to increase your mortgage or secure an additional source of financing.
- One person can continue to reside in the home and then later sell it when some time has passed. This may allow the market and your finances to improve.
- Consider the whole financial picture. You may be able to keep the home if the equity equals the value of your spouse’s pension, RRSP or cottage, creating equal assets for both of you.
- Before selling your home, consider where you will go and the costs. It may be that the home is less costly than purchasing another or renting.
- Even if you can afford to stay in the matrimonial home, you may want a fresh start in a new place where you can create new memories.
- Remember; when you sell your home, you usually have to pay 3% to 5% commission to the real estate agent and another $1,000.00 in legal fees.
- Many of the homes listed for sale are the result of a separation or divorce.
- After paying support, the home may be too costly for the payer and the support recipient may not be able to afford it either. This is common. Remember, you are establishing two homes with the same amount of income that you once used to finance a single dwelling. Usually, both clients must decrease their lifestyles to accommodate the change from one home to two homes. As a result, both clients usually have to downsize. This is the reality of divorce.
- If the home is jointly owned and increases or decreases in value after the separation, the increase or decrease is jointly shared with your spouse.
- Don’t buy a new home until you have a separation agreement in place.
- If you and your spouse cannot come to an agreement regarding the home, a judge in Family Court will order it sold.
- Instead of going to Family Court, use the Collaborative Process to negotiate a fair and creative arrangement regarding the home.
Ilan Joseph, who is a Vaughan real estate agent has a great article about this issue here.
