Divorce, Interests Rates, and the Family Home

What to do about the family home is one of the biggest decisions in divorce. There are many factors to consider, but how should you approach the decision during a time of high interest rates and slowing property prices? 

Here are a few questions revolving around the family home that you may be considering if you are going through a divorce in 2023: 

Should You Sell the Family Home During a Divorce? 

The question of whether to sell the family home has always been tough to decide, since there are certain benefits to selling the family home built into the divorce process. For people, whose homes have appreciated significantly over the years, particularly divorcing spouses in the Boston area who bought their homes for much less than their current value, selling the family home allows you to take advantage of a divorce tax exemption which reduces your capital gains tax. The exemption allows you to exclude up to $250,000 per spouse. Because of this, many people choose to sell the family home as part of their divorce. However, with homes sitting longer on the market and property prices slowing, this decision is not as clear cut as it once was. Some spouses choose to remain joint owners so they can hold on to the exemption and wait for the right time to sell the home. This should be carefully discussed with your divorce attorney as each individual situation will differ. 

Can You Afford to Buy-Out Your Spouse? 

If you are choosing to buy out your spouse and keep the house, you may have to qualify for a refinance on a reduced solo income. You will also be facing higher interest rates. This could mean that your ability to refinance is dependent on the financial support you receive in divorce. If alimony/spousal support and child support is a factor in boosting your income, divorce negotiations can become complex or hit conflict. When you are making the decision about whether to buy out your spouse, it is important to be informed about what you can afford versus what you will or should receive in a divorce. Advice from your attorney is critical. 

What to Do About the Kids? 

Another reason the decision to sell your home or buy out the other spouses interest may be difficult is that there is often a lot of memories and emotion tied up in the family home. Your kids might have grown up there or perhaps you or your spouse feel differently about whether kids will be uprooted if you sell the family home. This could be a factor in your divorce negotiations. In any decision involving kids, the focus should always be based on the “best interests of the child.” You must balance out the benefit to children of keeping the family home with the benefit of financial stability if it is no longer affordable to live in the family home. Some couples may have the flexibility to pursue a “nesting” arrangement for a fixed-time period, where the children stay in the family home until a date certain with one spouse and the other spouse rents an apartment which they live in when not parenting the children on an alternating basis with the other spouse. 

If you are going through a divorce and you are not sure what to do about your family home in Massachusetts, you are not alone. This is a difficult decision for most families to make, especially during times of high interest rates and an uncertain property market. 

At Amaral & Associates, P.C., at our Divorce and Family Law Center, you can consult with an attorney about a variety of family law issues, including how to carefully plan about the family home and how your kids may factor into any decision to sell or remain in the marital home. Please contact our Massachusetts Divorce Attorneys today to learn more about our divorce and our family law services. 

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