Options for the Marital Home – My Story

The best way to write an article about something, is to actually experience what you are writing about.  I firmly believe that one cannot possibly understand what it is like to go through a divorce, unless you have experienced it yourself.  This is true about all major life events that we experience throughout our lives.

So, when I set out to start my blog, Untying The Financial Knot, I knew that I would also write about my own divorce and how I handled the issues in my divorce that I wrote about.

In one of my recent blog posts, entitled ‘The Biggest Financial Mistake Women Make in Divorce‘, I addressed the financial issues involved with buying out your spouse’s equity in the marital home.  My premise is that most women cannot afford to buy out their husbands and therefor it is one of the biggest mistakes a woman can make.  I base this premise on my own experience and on the cases I work on as a CDFA™.

Someone reading my blog might say, “that is all well and good, but what do you know? Have you gone through a divorce?   Do you know what it is like to not know where you are going to live and the fear you have when your husband says we have to sell the house?”

My response to them is, “Yes, I actually do know what it is like”.

I remember having a conversation with my husband early on in the divorce process when I asked him if we would have to sell the house.  Much to my relief he said no, but then several months later, the circumstances changed.  He wanted to sell the house, complete fear set in.  I experienced waves of anxiety and panic that never went away and at that moment, my whole life changed.

I was angry and scared.  The thought of having to sell our home and start all over was almost too much for me at the time.  We had explored all our options prior to this, so I knew that we could afford to continue to own the home jointly after the divorce until our youngest graduated from high school, but at the time, this was not an option he wanted.  This is a common response during a divorce because the ‘out-spouse’ just doesn’t want the other spouse staying in the home that they had to move out of, even if it is in the best interest of the children.  One of my male clients once made the comment, “She’s living in the Taj Mahal and I’m living in a cardboard box!”

If owning the home jointly was not an option, then the only other option was to sell it.  Buying out my husband was not an option for me, because I knew I could not afford it.  Even with child support and alimony, there was no way I could pay the real estate taxes and all the other costs associated with owning a big house and still have money left over to live my life.  I had no option but to start looking for another house.

Unfortunately, all this took place in 2008, when the housing market was crashing right before our eyes.  On the one hand, this created a buyer’s market, which was great if I wanted to buy another home, but on the other hand, it was no longer a seller’s market and  the value of our home was falling with each passing week.  A lower selling price meant less marital equity or net proceeds to split.  Now I was wondering if selling in this market was a good idea.

One thing I knew though, was that since I only needed to stay in this town for less than 5 years, it really did not make sense for me to buy something only to sell it four years later, when my daughter graduated from high school.   What if the housing market didn’t recover and I was stuck in a house I couldn’t sell?  I might have to sell it below the original purchase price, which is something I knew would have a negative impact on me for years to come.  A common rule of thumb is to keep a home for at least 5 years in order to recover the initial closing costs.  If home prices are not rising, it may take even longer than 5 years to recoup both closing costs and the ‘cost’ of paying mortgage interest.

Since buying something did not make financial sense for me, I decided to look for a suitable house to rent.  However, since our town was not a true rental community, I could not even afford the $3000 – $4000 monthly rental amounts.  What now?

I felt I had no choice but to stay in the home.  Read Part 2 to see how I untied this financial knot.

 

be informed, be empowered, take control.  Don’t let divorce blow your finances off course…let me help you calm the waters, with Solutions For Divorce.

diane@solutionsfordivorce.com    978-833-6144

Every divorce is unique and laws and practices vary from state to state. Be sure to consult with your attorney, financial professional, accountant and other professionals in your state to understand what applies to you and what is best for you and your family. Taking information out of context generally has negative consequences. This article is not meant to provide legal or financial advice.

One thought on “Options for the Marital Home – My Story

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s