Going through a divorce is a stressful and emotional process that requires quite big life changes and adjustments on many levels, especially if children are involved. One of the first decisions people have to make is who is going to stay in the home and who is going to leave or if they are going to sell the place and share the proceeds. There is a lot to think about as a divorce impacts your financial standing, mortgage and taxes. Freshly divorced couples are most often very vulnerable at that time, but they still need to make rational decisions regarding their future, including housing. Here are a few options that divorced people can consider when it comes to staying and moving out.
What happens if you want to stay in the home
If you want to keep your old home, you will come across new financial challenges. First of all, you would need to buy out your former spouse and apply for refinancing of your mortgage as a single-income person. The lender will take into account the equity on the home gained up to that point but also reassess your financial standing to make sure that you can afford to pay the rest on your own as well as the buyout. One of the things you can do is talk to a professional, like a mortgage broker or a local real estate agent to understand all the steps that it will take to take over the remaining mortgage and the home and if and how you can afford it.
What happens if you sell the home
Selling your home and sharing the profit might be the most convenient way to deal with the division of real estate, but if children are involved, some parents may not be willing to put the kids through moving homes. However, if there are no kids or you think a fresh start will also do the kids good, selling the shared home is the best idea. While you probably will be able to sell it for more than you bought it for, especially if you live in the GTA where appreciation rate climbs fast, you should also know that if you are under a mortgage contract, there is a penalty fee to be paid for contract breach. Make sure to contact your lender to establish the amount of such a penalty fee and hire a reliable and professional real estate agent to sell the home at a maximum price and in record time.
Finding a new home
If you decide not to stay in the old home and take your share of the proceeds either from the sale or from being compensated in another way, you will need a new home. Many people decide to buy a new home instead of renting, especially if they are left with a not-so-small money amount after the divorce (e.g., from the sale of the old home, a buyout, settlement deal, etc.). If you also want to buy a new home, there are a few things to consider, especially your finances and new housing needs. Make a list of your needs and wants and calculate what you can afford in which locations.
One of the good things is that you will probably need a smaller place, which is better for your budget, and, as a previous homeowner, you already know the must-haves in a home as well as what you can do without. Have a real estate agent help you with the search, the mortgage deal you can get and the tiresome administration work buying a home involves. Here is what you gain if you work with Hussain.. With the right agent, you will get the right information about the market and be presented with homes that work for your budget, needs and taste. It is going to take a lot of work off your shoulders, plus you will be 100% sure that you have picked the right home for you.
Have questions about navigating your home during a separation or divorce? Answers are just a call away! Contact Hussain Al Hasani today for more info.