Divorce & Family Home | Refinance, Buyout, Or Sell | Dave Ramsey's Advice

Should we sell our house as part of a divorce
Comment 1 – I have not worked for 14 years…….
When one spouse is not working or even when both spouses are working and you are getting a divorce keep this in mind. You both have a combined income that you have become accustomed to and to utilize in paying the bills together.
Comment 2 - child support payments will be substantial?
What happens when you divorce is you now have 2 separate sets of living expenses when the other party moves out of the home. If there are children involved and there will be spousal support and child support paid to one or the other, the standard of living drops no matter what.
Comment 3 - He is still in the home due to finances We can’t afford for him to leave
This is very common. We find that at least 50% of our clients are still living together prior to filing for divorce. Especially in this situation where you have to make a decision on how you are going to make it work in regards to the home.
Comment 4 – do we sell the house – yes – I can’t afford the house….
So you can see how easy it is for a 3rd party to make a decision on whether to sell or try to keep the home. It is an easy decision when there is no emotional attachment to the home.
But when you are the parties involved and in this case there are two minor children, it has been my experience that the first thing the parties will try to do is find a way to keep the home for the benefit of the children, even when on paper, financially, it does not make sense and in many cases is not likely they could pull it off. Or as the very worst, the house be a financial burden as Dave says.
Comment 4 – Rent something as cheaply as you can.
This is another issue that comes up with our clients. The are finding out that that to rent a home after their divorce in many cases will result in a higher payment, especially if they are looking for something similar to what they had. In many cases, even renting a 1 bedroom apartment can be more than the current mortgage we’ve seen in a few cases. This is another reason we see our clients trying to hang onto the family home. The problem is, that is one spouse keeps the house, how to buyout the other party if you can’t or don’t want to refinance?

Video 2 – Overview – Once Divorce is decided the Marriage is turned into business transaction
Comment # 1 – House should either be sold or if refinanced into the name of the person keeping the home.
The advice that Dave give is the most logical advice. The issue becomes that if one spouse stays in the home and is unable to refinance then both parties will remain on the mortgage. The issue this poses is that if the spouse were to default on the mortgage, both spouses credit would be impacted.
Another issue is that this could impact the spouse who did not keep the home from purchasing another one.
Despite this being seemingly logical, we have many clients who decide to keep the house, keeping one spouse in the home, both staying on the mortgage. They are deciding to do this mostly because there are minor children. They may decide to keep in this fashion until the kids turn 18 and then agree to sell at that time.
Another decision couples are making currently is to hold the property jointly, whether one lives there or not or they rent it, to hopefully allow time to pass for the home values to go back up so there are more proceeds to split. Whether this is because they recently bought the home and there are no proceeds after the realtor gets paid or they simply want to get more out of the home.
Comment 2 – if you were a single guy would you buy that house.
Sometimes the decision to keep the house really does not make sense. We’ve had couples agree that one spouse would keep the family home that was 5,000 square feet. This house was great when they were raising their 5 children, but now the wife will be living here alone in this giant house with a equally giant mortgage.
Comment 3 – she can’t afford it -she shouldn’t stay in the house.
This goes back to what I was previously saying – and we find our clients in this exact position trying to figure out a way to keep the home for the children’s sake. While it may make sense on paper not to keep the home many of our clients are deciding to do so which is totally fine if that is what you agree to in the divorce.
Comment 4 – sell the house and split the proceeds and stay in general area…
In my opinion this is the cleanest break. You guys just sell the house and split the equity.


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