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5 Hidden Costs of Keeping the House After Divorce
1. House appraisal minus mortgage balance does not equal equity to be divided between spouses
If you will keep the house, have a home inspection prior to signing the divorce papers to determine if expensive repairs are necessary. Did you remember to subtract the projected expenses needed to get the house ready to put on the market or closing costs from the value you assign the house?
2. Under-estimating monthly expenses
Does your monthly budget include the cost to have the exterior of the house painted every 5 years, the deductible for your homeowner’s insurance, or the expense to remove a fallen tree? A complete should have 124 items.
3. Not budgeting for the unexpected
Include a contingency in your monthly budget for those unexpected bills. Have you considered getting a home warranty to cover large expenses? The most expensive and frequent house repairs include: HVAC, Plumbing leaks, Water heaters, Foundation issues, Termite damage, Roof repairs, Replacement of appliances.
4. Not performing a timely title search
Has your ex-spouse borrowed against the Home Equity Line of Credit (HELOC) while you were going through the divorce process?
5. Unpaid property taxes
Have property taxes been paid for the current year? If you keep the house and don’t address this issue before the divorce papers are signed, you could get stuck paying for the whole year of taxes. Is that in your budget?
Divorce is the 4th most frequent reason cited for bankruptcy in this country and Tennessee has more bankruptcies than any other state. Tennessee is also near the top in the nation for foreclosure rates. Don’t become a statistic. Understand the numbers before you sign your divorce papers. Secure your future and your children’s future.
The Tennessee court may award the family home and effects, or the right to live there for a reasonable period of time, to either party, but shall give special consideration to the spouse having physical custody of a child or children of the marriage.
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