Divorce takes a financial toll on everyone involved, especially those whose ex-spouse was the main breadwinner. Most divorced people wish they could have been more financially independent during the marriage. Almost half of divorced people say their creditworthiness deteriorated during the marriage, especially women.
Divorce affects several areas of a couple’s life. The family residence is usually the most complex. Regardless of whether a couple decides to keep the home or sell it, it is inevitable that their circumstances will change.
The decision to sell the marital home leads to further challenges. For example, if both names are on the certificate, it is owned jointly. Because of this, it is important to understand your options to buy and sell during the divorce.
In many cases, only one spouse can list the property, but both parties must sign the listing agreement, purchase agreement, and various closing documents. One spouse cannot sell the house without the other’s consent.
Buy and sell options for the marital home after the divorce
There are a few questions that need to be asked and answered about a couple’s options to buy and sell when they divorce:
1. How is the real estate professional selected to sell the home?
2. Will it be a joint decision?
3. Will both be available for demonstrations or will one allow the other to make the decisions on their behalf?
The better the communication between the two, the more efficient the sale will be. This is extremely important for those spouses who are relying on the sale of the property to acquire the funds to move on.
What if a spouse wants to keep the marital home?
A spouse may choose to stay and stay home. If so, whoever remains in the house should become the legal and sole owner of the property. You must be financially qualified for the new loan in order to purchase it.
Removing a party’s name from the title does not remove financial responsibility for the mortgage: sole financial responsibility is only assumed with a new mortgage. With the decision to give the marital home to one party, the other spouse can decide to buy another home. This decision can create a multitude of new challenges.
Divorce can be financially stressful
Divorce, coupled with the stress of living on a single income, can create significant financial strain. Overspending and credit card debt are the most common problems affecting the credit score of the divorced. The spouse who chose to keep the house may not be able to get a mortgage. Financial responsibility remains a mutual obligation until the mortgage is modified.
Without a final divorce order, some documents may require your spouse’s signature even if they do not live in the new home or if their name is not on the new title.
A financial review is strongly recommended to both parties. Make an appointment with a qualified real estate or finance professional, find out how much the house is worth in today’s market, and know your purchasing power.
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