Typically, a couple who owns a home has three options when they decide to divorce: they can sell the home and divide the profit; they can keep the home as co-owners; or one can keep the home, buy out the other’s share and refinance the mortgage solely in their name.
This third option is a common choice when there are young children involved, or in other situations in which one spouse doesn’t want to move. Unfortunately, the economic realities of the housing market can sometimes make it unaffordable. Many people going through a divorce are facing this issue today, as housing costs are rising and interest rates are higher than they were just a few years ago.
Rising home values and higher interest rates
The value of your home will be a big factor to consider no matter which option you choose.
If you choose to sell, consider how that could play out. The rate at which home prices have risen in Gulfport changes from year to year, but the long-term trend shows steady growth. If you and your spouse purchased your home 10 years ago, you stand to make a healthy profit if you sell it and split the proceeds. However, that alone may not be enough to help you afford a new place to live for yourself, especially now that you’ll be living with a single income.
You’ll also have to consider interest rates.
Interest rates for home mortgages are higher than they were just a few years ago. This could affect your divorce plans no matter which option you choose, but the situation could be particularly sticky if you want to keep the home and refinance it in your name alone. You may have been lucky enough to buy your home at a low rate 10 years ago, but you won’t be able to get that rate if you refinance today.