Usually, your home is the most valuable asset you own so you should weigh your options before making any decision during a divorce. The ideal situation would be to put the emotions aside and pragmatically analyze the available options. A divorce financial analysts and accountant could be a good idea if things are complicated for example the house is not entirely a marital property, or the house is titled jointly but the mortgage is solely in one of the parties’ name. If you add to this already complicated picture some liquid assets like 401Ks, bonds, stocks or money market accounts you can see how this can become overwhelming,
Let’s take each option you have with your house in Indianapolis and analyze it:
1. Keeping the house
It will be a good decision to keep the house if:
- You need the space as you have minor children that in the next years will not leave the nest to go to college and in the same time, you don’t want another change in their lives on top of the divorce trauma.
- You have enough marital assets to buy out the portion of the other spouse. Don’t forget that in [Market State] you have to determine the home equity before realizing you can buy the other party out or not. The home equity is the difference between the market value of the house and the liens against the same house, meaning the liabilities like a mortgage or a home equity line of credit you as a family, or just one of you have placed against the house. The market value is the current most likely selling price for the asset you as a seller will get on the open market. Finding out the market value can take two venues depending on how amicable your relation is with your future ex. If the relation is OK you can check on the net prices for similar houses in your neighborhood. If the relationship is tensed and confidence between each other is below zero you will have to hire an appraiser and your spouse will hire another and you might end up dealing with antagonistic appraisals. Make sure that after buying the future ex side you still have a diversified portfolio of assets and you are not left just with an illiquid asset, your beloved house.
- You have a good mortgage, perhaps a small fixed interest rate, and/or small HOA fees and the market conditions have improved from the moment you purchased the property. Under these circumstances keeping the house might be a sound financial solution.
2. Refinancing the house
- If the household was a dual income earner one, refinancing might be the best option. The party wanting the house will be able, without a major effort, to pay for the other spouse share via refinancing.
- You might also use the unequal distribution of assets option offered by the other spouse in his / her endeavor to minimize alimony. This money can be used to refinance the house with less pain.
- Alimony itself will be considered income when the lender will evaluate your refinancing application.
3. Selling the house
- The nest is empty and/or the house is too big and too costly to keep for one person.
- Neither the wife nor the husband has enough income to buy out the other party. The major or the only marital asset is the house so there are no other assets to liquidate and some lenders will support the refinancing based on one income.
- The other party needs to free cash up for various reasons.
- Don’t forget to take into consideration the capital gain tax. Selling the home during a divorce means you and the future ex can exclude the first $250,000 of “gain” from any taxable income if the house was your principal residence. If we are talking about expensive houses you have to take into consideration taxes when you decide to sell. In the case of vacation houses, there are no exclusions when calculating the capital gain tax.
- You want a clean slate and don’t want to live in a house full of memories.
Are you thinking that selling your Indianapolis house fast due to the divorce so that you can both move on with your lives is the best option? If so we can help you sell your Indianapolis house quickly by buying it for cash. Christopher Ellyn Homes can purchase your property no matter the condition. In most circumstances, we can close within 9 days.
If you’re ready to break free of any connection and commitment by selling your Indianapolis house during a divorce, call us at 317-782-5481 or simply fill out our form.