Adults potentially considering a divorce will often focus their planning and strategy on specific wishes or assets. For many couples, the possession that spouses most hope to retain is the family home. That makes sense, as real estate in Louisiana is typically quite valuable.
Your home could represent a substantial portion of your overall income and assets earned during your marriage. Some people pay as much as 30% of their monthly income toward their mortgage.
The equity you have accrued during that time could be tens or even hundreds of thousands of dollars. Obtaining a fair share of that money should certainly be a concern during the divorce. However, you should carefully look at whether you really want to retain the home itself.
Can you afford the home on your own?
The first thing you need to consider is whether you can afford to pay the mortgage on your own. Many people live in a house whose overall cost reflects the income of both spouses, which means that neither spouse makes enough on their own to qualify for a mortgage of that size after a divorce.
It can be difficult to consider downgrading the size or location of your home, but it may be necessary depending on your financial circumstances.
You might not want to live in the space that you shared anymore
Your marital home is where you shared a lot of beautiful memories with your ex. From celebrating birthdays and holidays to waiting for the bus with your children, there are many things that happened in that home that you will likely treasure for the rest of your life.
Still, just because the house was the site of something positive in your life doesn’t mean that you need to retain ownership of the home just to stay connected to those pleasant memories. Many people find it difficult to stay in their marital home after a divorce, as everything in the space may remind them of their previous relationship.
Do you really want to continue paying on that house for years?
Even if you and your spouse have paid off your mortgage, chances are pretty good that you will have to finance the property and cash out some of the equity if you retain possession of the house. That’s because Louisiana uses the community property standard when dividing personal property. You and your spouse have a right to an equal share of the accrued value in the home or at least of the overall marital estate.
Refinancing and paying some of the equity out to the spouse who will not reside in the home is standard practice. In some circumstances the courts will simply allocate other valuable assets, such as retirement accounts and real estate holdings to the other spouse. Chances are good that you will have to liquidate some of the equity and then pay off the amount you cashed out in the upcoming years.
Trying to be practical and focus on financial and not emotional reasoning when deciding what to do with your house during a divorce can help you avoid emotional pitfalls in decision-making that could hinder your financial recovery.