Mediation Conversations: Should I Keep the House?

If you’re like most of the couples we see at Equitable Mediation Services, your single biggest asset is your house and especially if you have children, the decision on whether or not to keep it is a big one.  In today’s post, we’ll take a look at some important conversations you should have with your mediator (and yourself) when determining if you should keep the house or not.

The image of home conjures up lots of great memories of holidays, birthdays, family time and the safety and security that owning a home can bring.  But on top of all of that, home ownership can also bring problems including busted pipes at 2 in the morning, leaky roofs, high property taxes and the never ending stream of projects that only seems to grow longer as the seasons unfold.  Let’s face it: maintaining a house is a lot of work.  So should you really fight to keep the house when going through a divorce?  As a New Jersey divorce mediator, you already know that I can’t tell you what to do but I can tell you some things your should consider to help you make an informed and fact-based decision.  It has been my experience as a divorce mediator in NJ that many of the individuals who end up fighting for the marital home aren’t doing it to improve their share of the equitable distribution but rather for emotional reasons which may be hard to quantify now but may cause financial hardship down the road.

If you’ve been paying attention to the news as of late (and who hasn’t given that the message seems to be loud and clear – we’re in a financial meltdown!) you know that many Americans have not been living within their means, spending more than they make and thinking the endless stream of credit and happy times will last forever.  Well my friends, the brakes have been firmly applied and the party is truly over.  But that doesn’t mean that all hope is lost but rather than we need to return to good old fashioned tried and true things that work like budgeting and saving.  Imagine that – budgeting to see if we can actually live on what we make.

Houses are expensive and they cost a lot more than the mortgage payment.  I know you really want to keep the house but ask yourself this one question:  “can I really afford to keep the house up in the manner of which I am accustomed to living?”  We’ve all heard the stories about people who buy these large McMansions in the burbs only to leave them empty inside as they can’t afford furniture.  Can you afford furniture?  Then you’re probably better off than most folks but what if something goes wrong?  Will you be able to fix it?  To answer that I say: do a budget.

In a recent article I read, the author kept track of her “additional expenses” she incurred over a four year-period of owning a modest home in the mid-west.  She put the average additional cost of owning this home over a four year period at around $47,800 which equates to roughly $12,000 per year so basically on top of your monthly mortgage payment expect to pay about another $1000 per month. Where does that go you ask?  How about:

1. Property Taxes – subject to the whim of your local government, naturally.
2. Utilities - look at the recent spike in gas and oil prices and see what it did to your bill.
3. Lawn Care - even if you cut your own grass and put down your own fertilizer, that stuff is expensive!
4. Snow Removal – one good blizzard or two and you’ll be putting away your shovel for good and either hiring someone or buying a snow blower.
5. Pest Control – termites don’t care if you can afford to get rid of them or not.
6. Appliance Replacement & Repair – with everything electronic today, expect repairs to cost much more than they used to.
7. Home Maintenance & Improvements – painting, carpeting, new sheets, towels, replacing broken glasses, etc. because we all know kids do some serious damage!
8. Capital Repairs – new roof, new hot water heater, etc.

If you’re living from check to check and one of the major expenses pops up, what will you do?  Live without hot water until you can afford to fix it? Not exactly the best for your mental health or the health of your children should they be living with you at the time.  Don’t underestimate the stress and strain of not being able to afford to live can bring so ask yourself again: “can I really afford to keep the house up in the manner of which I am accustomed to living?” If you accurately budget the items above based on your particular situation, then you will have a much better chance at answering this question.

So what if after you do the budget the answer comes back and it’s no, you cannot afford to keep the house?  Let me be the first to tell you a secret: that’s OK!  Let me assuage you of the guilt that not being able to keep your children in the house they grew up in brings as kids are resilient (I’m a child of divorce so I know of what I write) and they will survive.  To them, mom and dad are home, not the four walls that surround them.  And if you’re so busy working three jobs to pay for the house you can’t afford and stressing out over all the projects you’ll have to do yourself since you can’t afford to pay someone to do them, then what kind of time will you spend with your children? How will they live or know that they are loved and you really do want to spend time with them if you’re too busy with the house?  So what do you do? Repeat after me: do a budget!

Now that you’ve taken a serious look at your housing expenses and all other expenses that you will incur post-divorce and you now have a good idea of what your income stream and payments will look like through employment, child support and perhaps spousal support, you will have a much better idea of how much you can afford for housing.  With today’s market being what it is, you will be surprised at what you might be able to afford as it may have been out of reach just a few short years ago so don’t give up hope of owning a home just yet, just be open to the idea that it may not be the home you lived your married life in.

Then again, a fresh start isn’t necessarily a bad thing.

If you have any questions about divorce mediation or how mediation can benefit you, please feel free to contact us to schedule a free, no-obligation consultation in one of our six central New Jersey office locations where we will take some time to get to know more about you and your situation and see if mediation is right for you.  Of if you’re simply not ready yet, feel free to visit the Equitable Mediation Services website where you’ll find lots of great information about parenting plans, equitable distribution, NJ child support and spousal support / alimony and contact us when you’re ready.  We look forward to helping you get through your divorce peacefully, efficiently and with as little stress on you and your family as possible.