The fate of your marital home is bound to be one of the major questions in your divorce. It is possible you may want to keep it or you prefer to sell it off and make a fresh start. Whichever option you choose, be aware that not resolving certain issues involving your home could come back to haunt you.
Kiplinger explains a number of problems that you could encounter whether you keep your marital home or not. Any of them could seriously impact your ability to get on with your life.
Incurring unnecessary liability
If you do not want your marital home, make sure that your name is not on the title once your divorce is complete. Otherwise, you could become liable if certain circumstances ensue. For instance, your property might cause damage to a nearby home. The other property owner may come after you for damages because your name remains on the title.
You also retain responsibility for home-related costs like property taxes. If your spouse still owns the home and does not pay them, the government may require you to pay the taxes. In addition, you could become liable for unpaid bills for home repairs or renovation. Creditors may come after you and you could face damage to your credit.
Difficulties in assuming a mortgage
In the event you hold on to your marital home, your spouse will probably remove his or her name from the mortgage. However, your lender might have some concerns. Banks generally feel comfortable with two people responsible for a mortgage, so if you are going to take on the loan yourself, your lender may require some proof that you can assume the loan without financial difficulty.
You might have to get a new loan in your name before you can take on the sole responsibility for paying the mortgage. If you cannot qualify for a loan, you might not be able to assume sole ownership of your home.
Know your options
A thorough examination of how to disentangle yourself from a marital home or how to assume sole ownership of your home is a critical step if you want to emerge from divorce without unnecessary problems. Consider looking at your financial situation to see if you are ready to take over the responsibility for your home or if a cheaper living arrangement is more worth it.