How to handle the family home is often a tough and emotional question to deal with during a divorce or separation in New Mexico. There are many good memories associated with the family home, and it can be hard to face losing those reminders. When you have children, this is an even trickier subject because you are also worrying about how they may feel about losing that surrounding.
If you want to keep the family home, you may be able to buy out your spouse’s share instead of selling the property and having to move out. This is not the right move in every situation, however, so before you make a decision, consider all the upsides and downsides of doing so.
What Will the Buyout Total Be?
Calculating how much the buyout amount would be is essential when you are trying to decide whether it’s a viable option. In general, the amount you need would be half of what you own of the home’s value after you subtract the balance left on your mortgage, if any.
Should both you and your spouse agree on the market value of the home, you can go ahead with the buyout without hiring a professional real estate appraiser. If you disagree, however, bringing in an appraiser to settle the questions will help the process move forward.
Will You Be Able to Get Your Own Mortgage?
Unless you have the money for the buyout on hand, you will need to get a mortgage on the home in your own name to give your spouse his or her share. Get all your financial documents together and speak to mortgage lenders as soon as you can to see what you can qualify for. Keep in mind that you will likely have to get a loan that covers the current balance on your existing mortgage plus the buyout money you will owe your spouse.
Is It Affordable?
You can still qualify for a mortgage without being able to comfortably afford it on top of all your other living expenses. Beyond the mortgage payments, real estate taxes and homeowners insurance, you’ll also have to be able to save money for repairs and upkeep and an increase in property taxes, which can happen with very little notice.
Negotiating Your Buyout
While the buyout may involve you simply paying a lump sum to your spouse as mentioned above, you can make different arrangements that impact the total buyout amount. If you want to buy the house, for example, you can give up your claim to other marital assets, such as a retirement account, and take that asset value reduction on the buyout amount. You or your spouse may propose that the buyout happens over a period of time, but keep in mind that this can be risky for the person who is selling. When both of your names remain on the mortgage, you are both fully responsible for the payments on the loan, including missed ones.
There are a lot of understandable reasons to want keep the family home in the wake of a legal separation or divorce. Before you decide to do so, however, you will need to take stock of your financial situation as it will be post-divorce and as it is now. Opting for the buyout only to discover you can’t afford to keep the home later will result in you losing the house, and you can take other assets in the divorce instead to ensure your financial future. If you are not certain what to do about the family home, you can also speak to your family law attorney for advice.