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Developing a housing budget after divorce

On Behalf of | Feb 3, 2017 | Property Division

Emotional issues often drive people’s decision to end a marriage, but the divorce process entails many important financial considerations. Once a couple splits, each party must establish a new household with a single income, which could be difficult in many housing markets in California.

Financial advisers recommend that people set emotions aside when making choices about housing. Although keeping a home in a divorce might tempt some people, moving out could present the better option. A new place to live might provide a fresh start in life and save money. The mortgage, taxes, and insurance on the home bought during a marriage could strain a single-income budget too much for comfort.

Often, a couple chooses to sell their marital home and divide the proceeds. Because the money leftover after the sale represents each person’s bankroll for new housing, financial planners encourage people to work with experienced real estate agents who might get the maximum return. The terms of the divorce settlement or court determination might also affect the amount received by each party. Factors such as who made the down payment on the home might influence the division of assets and reduce the other person’s share. Once the parties know how much money will be received from a home sale, then a budget can be established for a new house or apartment.

Property division is often one of the more contentious aspects of the divorce process. In order to avoid having a court make these determinations, many couples try to negotiate a settlement with the assistance of their respective family law attorneys. Legal counsel will often advise their clients not to make a hasty decision solely to get the matter behind them as quickly as possible, as this could present financial problems down the road.