In the United States, nearly half of all marriages end in divorce. When a married couple divorces, they are beginning a legal process that will divide what they have accumulated during their time together. Divorces can be amicable and progress quickly, however they can also be difficult and a very long drawn out process, especially when multiple types of assets are in dispute. One asset that can create controversy during a divorce is your house. After all, our lives, memories, and self of family are tied to our homes. While the home may be an emotional investment for a couple, it is also their biggest asset. According to research, Americans on average have $150,506 of wealth tied up in their homes. During a divorce proceeding, there may be many months when the home is in dispute. This can lead to missed payments and in a worst case scenario home foreclosure.
A foreclosure is a process by which the lender or lender recovers a loan by repossessing the property that the loan was for and reselling it to recoup loss. The process of foreclosure begins when a borrower fails to make mortgage payments over an extended period of time. Home foreclosures can happen for many reasons, but there are five reasons that are the most common. Deemed “the five D’s” these scenarios include death, drugs, disease, denial, and finally divorce. Divorces are fraught with emotions, confusion, and ever-changing legal battles that can leave one or both homeowners unwilling or unable to care for the property. Avoid possible downfalls and protect your home with these strategies.
Keep Up with the Mortgage Payments
Divorces take time to be legally sorted out. During the time of limbo, you and your soon to be ex spouse will need to figure out how to pay for the home you both own. If your spouse would like to keep the home for themselves and you are willing to comply, they can refinance to qualify for a mortgage with his or her sole income and buy out your share of the equity. This can work in the opposite way if you would like to keep the house.
Sometimes couples who are parting ways prefer to sell the house outright. This can be difficult financially and emotionally. Selling a house can take time and while you and your ex wait for a sale to go through you will be required to keep up with mortgage payments. If only one of you is living in the home or if both of you have moved out and are paying rent or mortgage elsewhere, it may be difficult to continue with payments. There may also be complications in communication which can lead to missed payments.
In order to relieve some of the stress you may be feeling, speak to your divorce attorney about a Property Settlement Agreement. A PSA does not legally change the terms of your original mortgage agreement. But it can help to address difficult aspects related to your house. If your spouse is going to refinance the home in their name, this will need to be stated as well as the date he/she will do so. It can also include a clause that indicates the mortgage company provides you with a copy of monthly statements so you can monitor payments. Finally, a PSA will address financial penalties and consequences to be imposed if a payment is missed.
Maintain the Property
When your marriage is ending it can be difficult to focus on the state of your home. After all, who cares if the bushes are trimmed or the HVAC filters have been changed when your life is currently turned upside down. Despite how difficult it may be to maintain your property during tumultuous times, it is necessary. A home that has been neglected will lose its value and could quite possibly cost more in the end. For instance, if there is a small water leak in a bathroom sink that is neglected, overtime that leak will cause damage to the floor and possibly end up as a mold issue. What was once a small fix is now a large repair that will lower your home’s value when you go to sell. There are hundreds of issues just like this that can come up especially if you own an older home. If this is something you are currently dealing with, speak with your divorce attorney. They can help you obtain a divorce decree or a separation agreement that will determine who is responsible for home repairs and for the costs. This will allow for a specific method to maintain the home and pay for the maintenance and necessary repairs before the home is listed for sale.
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Listen to the Experts
Ending a marriage is emotionally and mentally difficult. Proceeding with a divorce adds financial and legal stress to what is already a difficult situation. To relieve a bit of your stress you should find a group of experts to rely on. Divorce attorneys are experts that can guide you through a complicated and drawn out legal process of dividing assets, property, child custody, etc. Ultimately, a divorce attorney is an unbiased professional who can take the emotion out of the situation and focus on the financial and legal information. You should also have a trusted real estate agent. He or she will advise you on the best time to sell your home as well as how to prepare your home for sale, and even find a new home if you are in the market for one.
Working through a divorce is difficult. But there is no need to make it more difficult and financially disruptive by allowing your home to go into foreclosure or fall into disarray due to neglect. Work with a trusted real estate agent and divorce attorney who can help you protect your asset and hopefully come out of your divorce in a stronger financial position.