In the prosperous economic times of the 1980's, 90's and early 2000s, the family home was often the most coveted asset in a divorce. However, changing economic conditions and an “upside down” real estate market have changed the perspective on “keeping the house.” Even in these uncertain times, sentimentality and continuity for the children are leading reasons spouses want to keep the family home, while conditions, such as inflated mortgage payments and negative equity, have lead to new and innovative ways to maintain ownership.
Here are some of the options for the family home available to divorcing couples:
Sell The Home
The most straight-forward way to deal with the home is to sell it and have the spouses divide the proceeds.
Pros
- Provides a "clean break" for the spouses
- Removes a major financial tie to one another
- May be able to take equity in the home
Cons
- House may be "underwater" and couple would have to pay money at the closing
- Children lose the "Family Home"
- Down housing market means house could sit for months or years before selling
Refinance
Refinancing is a way to have one spouse solely own the house and to retain it as the family home
Pros
- Allows one member to retain the Family Home and provide continuity for the children
- Provides a "clean break" for the spouses
- Removes a major financial tie to one another
Cons
- Tight credit markets may make refinancing difficult
- One spouse is liable for all costs of house...mortgage, insurance, taxes, repairs, etc...
- Being "Underwater" may make refinancing difficult
Exclusive Use
"Exclusive Use" is where the house is still owned by both spouses after the divorce. They are both still jointly responsible for the mortgage and other costs (percentages can vary). However, the spouse with the majority of the time with the children is granted “Exclusive Use” and stays in the home, while the other spouse establishes another residence.
The "Exclusive Use" of the home is granted for a designated (agreed upon) period of time (ie - until the youngest child graduates from high school, until the youngest child turns 18, etc...). The house is then sold after the agreed time period and the spouses split the proceeds of the sale.
Pros
- Allows the Family Home to remain in tact for growing children
- Buys time for spouses to allow house to possibly move from "Underwater" to "Positive Equity"
- Costs of house can be divided...mortgage, insurance, taxes, repairs, etc...
Cons
- Still financially tied to spouse after divorce and until sale
- Still liable for a portion of the costs of house...mortgage, insurance, taxes, repairs, etc...
- Being on one mortgage may make it difficult for the "non- use" spouse to get another mortgage
In the face of a tough real estate environment, tight job market and difficult economic conditions, some couples have chosen to follow some unconventional living arrangements after their divorce.
Living Together
An increasing number of couples are choosing to continue to live together in the family home even after the divorce is final.
Pros
- Saves Money
- Keeps both parents in the home
Cons
- Spouses are still financially tied to one another
- Spouses have No "Break" from another. Volatile homelife that may have lead to divorce may continue
Bird Nesting
"Bird Nesting" is where the couple keeps the family home & also rents an apartment to share. In this arrangement, the children remain in family home at all times. One parent then stays in the home when it's their turn to be with the children (as designated in the parenting plan) while the other parent then stays in the rental apartment until it's his/her turn to be with the children. The couple then switches places in the home/apartment.
Pros
- Stability and continuity for children
- Spouses able to have minimal contact
Cons
- Difficult for spouses to establish a "new life" with another partner
If you have any questions about your divorce, please give us a call at 800-472-8050 for a Free Consultation. This information is NOT meant to be legal advice. It is only intended to be general information about divorce in Florida. Click on the link to read more about Florida Divorce Law. If you have specific legal questions, please consult with your attorney.
