Divorcing Home Owners: Be Prepared

To successfully handling the disposition of the family home in a divorce you have to have a clear understanding of your financial standing. Knowing your precise financial situation throughout the emotional turmoil of divorce will keep you from making snap decisions that could severely impact your financial position.

It is crucial to know who bears legal financial responsibility for making the mortgage payments. If both spouses are listed on the mortgage agreement, they are equally obligated to the lender, whether or not their name is listed on the property title. Removing a party from a property title does not relieve the financial obligation of that party. Two signatures on the mortgage means two responsible parties. This also includes the homeowner’s insurance policy. It is important to know who is the beneficiary and if both parties are insured.

For the previously stated reasons, it is critical that you collect and immediately provide to your lawyer (and/or to your Certified Divorce Financial Analyst, CDFA*) all information regarding your home insurance, property taxes and liens, mortgage and marital debts, and marital assets. The more prepared you are to face your financial future, the more secure you will be moving forward. Knowing where every dollar has to go will help you make better decisions and avoid adding undue additional stress to the already uncertain future that accompanies divorce.

Knowing where you stand financially greatly influences your decision to keep, sell, or buy out the family home. There are many considerations for each option, and they all require a significant amount of due diligence, financial planning, and difficult decisions.

Affordability and objective forethought are the keys to your decision-making process. Poor decisions can affect you and your former spouse, long after the divorce is finalized.

*I can help you find a local, NJ CDFA.

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