I’m divorcing: Can I afford to keep the home?

If you’re planning to keep the house in your divorce, be sure to consider the chores your ex-spouse used to do. Unless you’re willing to take on these responsibilities, you will need to pay someone to do this work. Don’t forget to include these expenses in the total cost of homeownership.

Many of our clients own a home and need to decide what to do with the property in the divorce.

Sometimes, the clear answer is to sell the home. If both spouses wish to move away and get a fresh start, and neither party feels particularly tied to the home, selling the home can make sense. For other couples, the home is their largest asset. If neither party can afford to buy out the other party’s equity, then selling the home may be a good option – the net sale proceeds can easily be split between the parties.

Other times, one or both spouses are interested in keeping the home. The home may have sentimental value. They may have custom built the home years ago, or the home is where they raised their children. Others wish to stay in the home for the kids – the clients believe that divorce is enough upheaval without having to move the children to a new home.

When our clients hope to keep the family home in the divorce, we try to determine if the client will be able to afford the home as a single person. To understand whether you can afford to keep the home in your divorce, consider the following questions.

Question 1: Can I afford the mortgage?

This question is a no brainer. Unless the home is owned outright, a mortgage payment will be due each month. Do you have enough income to pay the mortgage and all your other expenses, like groceries, utilities, childcare, and transportation? To answer this question, you will need to estimate two numbers: (1) your monthly income and (2) your monthly expenses.

To estimate your monthly income, add up all your sources of income, such as your take-home pay from work, child support, and spousal maintenance.

Next, we suggest building a budget to estimate your monthly living expenses. To get an accurate estimate, try reviewing the last few months of your bank and credit card statements. Or, use software or a notebook to track your spending for the next few months.

Finally, consider how your income and expenses will change over time. Generally, there is an end date for child support and spousal maintenance. Once you no longer have these income streams, will you still have enough income to pay for your monthly expenses, including the mortgage? Consider also how your expenses may increase in the future. If you anticipate needing a new car soon, will you be able to afford a car payment and the mortgage?

Question 2: Can I afford the home maintenance?

The cost of homeownership is more than the monthly mortgage payment. Routine maintenance (such as lawn mowing) and large one-off expenses (such as a new roof) must also be considered. Expenses that come only a couple times a year, or once every few years, are easy to forget. Try to forecast upcoming home expenses and then add a portion of the expense total to your monthly budget. For example, if you pay $300 per month for landscaping four months out of the year, the annual landscaping expense is $1,200, or $100 per month.

Also consider the chores that your ex-spouse would complete around the house. Did your husband clear the gutters? Did your wife weed the garden beds? These responsibilities will now fall to you. If you are unwilling to tackle this work yourself, you will need to pay someone to do it. Be sure to include these new expenses in your budget.

If you need help understanding if you can afford to keep the family home after your divorce, contact Serene Divorce Planning today.

This information is educational in nature and should not be relied upon for legal or tax advice. Serene Divorce Planning LLC is not an attorney and does not provide legal or tax advice. Individuals seeking legal or tax advice should solicit the counsel of competent legal or tax professionals knowledgeable about the divorce laws in their own geographical areas. Serene Divorce Planning LLC does not sell or consult on securities.