Sell, Keep or Refinance My House During a Divorce in Charlotte, North Carolina

Sell, Keep or Refinance My House During a Divorce in Charlotte, North Carolina

Usually, your home is the most valuable asset you own, so you should weigh your options wisely before making any decision during a divorce. The ideal situation would be to put the emotions aside and analyze the available options. A divorce financial analyst and an accountant might be a good idea if things are complicated. For example, the house is not entirely a marital property, or the house is titled jointly but the mortgage is solely in one of the parties’ name. If you add to this already-complicated picture, liquid assets like 401Ks, bonds, stocks or money market accounts, you can see how this can become overwhelming,

Let’s take each option you have with your house in Charlotte, NC and analyze it:

1. Keeping the House

It may be a good decision to keep the house if:

  • You need the space, as you have children that won’t be leaving the nest soon or  want to minimize changes in their lives on top of the divorce trauma.
  • You have enough marital assets to buy out your spouse. First, you’ll have to determine your home’s equity and what you would owe your spouse once your divorce is finalized.  You can calculate your equity by taking the market value of your home minus the liabilities owed against the property. Market Value is your most likely selling price you’d get in the current condition of the home.  Liabilities are things like your mortgage, any home equity lines of credit, liens, or IRS debt if owed.
  • You can afford the home on your own. If you have a relatively low monthly payment between your principal, interest, taxes and insurance and it’s not hurting your finances, you may wish to keep the property.  Perhaps the home is appreciating quite a bit since you have purchased.  Under these circumstances keeping the house might be a sound financial solution.

 2. Refinancing the House

  • If both parties are dual income earners, refinancing might be the best option. The party wanting the house , if qualified, may be able to pay for the other spouse’s share via refinancing.
  • You might also use the unequal distribution of assets option offered by the other spouse in his / her endeavor to minimize alimony. This money may be used to refinance the house with less financial burden.
  • Alimony itself will be considered income when the lender will evaluate your refinancing application.  Your debt-income ratio with alimony may be more favorable for you to qualify for

3. Selling the House

  • The children have left the home and/or the house is too big and too costly to keep for one person.
  • Neither partner has enough income to buy out the other party. The biggest or the only marital asset is the house so there are no other assets to liquidate and refinancing is not an option based on only one income.
  • The other party needs to free cash up for various reasons and you cannot buy them out.
  • Don’t forget to take into consideration the capital gain tax. Selling the home during a divorce means you can exclude the first $250,000 of “gain” from any taxable income if the house was your principal residence.
  • You want a clean slate and don’t want to live in a house full of memories during your marriage.
If selling your house is the best option or you’d like help in weighing them all out, give Pinnacle Home Buyers a call!  We can lessen the stress of selling your home, allow you to choose the date of closing, purchase your property as-is, and in most circumstances, we close within 7 days.
If you’re ready to break free of any ties and commitments by selling your Charlotte, NC house easily during a divorce, call us at 704-323-6528 or simply fill out our form.

 

 

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