You’re recently divorced and as a part of the settlement you got the house. That’s a good thing, right? Not always. While a Property Settlement Agreement (PSA) in your favor sounds like a win on the surface it can in fact leave you penniless. Today we’re here with some much needed advice about what you need to consider and do to alleviate the potential financial burden of maintaining a home after a divorce.
3 Things You Need to Do When Your Divorce Has Left You With a Home You Might Not Be Able to Maintain
Assess Your New Monthly Income and Remaining Mortgage
Your monthly income has changed. For dual income households it may now be cut in half. For dependents the income will now be based upon alimony and other financial settlements that may result in monthly income (investments, etc.). You’ll need to assess both this and your prospects for the next six months. In order words, will you be able to find a job to supplement the reduced income within the appropriate amount of time to cover the costs of maintaining the mortgage (if there are remaining payments)?
For homes where there is a remaining mortgage, you as the new solo mortgage holder now has to qualify for the remaining amount of the mortgage on your own. This may prove difficult considering your single income. You may have the option to refinance the mortgage, but again you still have to qualify on your own.
If you’re receiving support, it’s important to note that there are rules regarding what support can be counted as income, especially if you’re receiving child support and your children are still young. Typically lenders like to see that support accounts for only up to 35 percent of income. Lenders will also request bank statements to demonstrate that the support is actually being paid. With Statistics Canada estimating that 45 percent of child and spousal support orders are in arrears you can see why lenders are concerned about this as a true source of income. Just like with a credit history, the longer and more consistent the history of spousal support payment, the better.
If after accounting all of the above you find that even managing the remaining few mortgage payments is too much to bear, you will probably need to sell, and fast.
Consider the Other Expenses of Maintaining the Home
For some of you the mortgage will already be paid off, or near enough to being so that you can dip into savings to cover it. Then what? There are many other financial burdens that come from owning a house as a single person, and when you’re accustomed to sharing those expenses and duties the burdens can be and feel more cumbersome than ever.
If your prior spouse was “in charge” of many of the responsibilities of managing the property, you may not yet fully realize what awaits. Here is an accounting:
- Property tax
- Homeowners insurance (including comprehensive coverage for third party liability)
- Landscape upkeep (including adherence to municipal bylaw requirements)
- Exterior upkeep (roofing, gutter systems, exterior cladding, etc.)
- Interior upkeep (insulation, plumbing, mold/mildew prevention, etc.)
- Security (especially for those in problem communities)
All of the above present significant cost burden, and a failure to fulfill any or all of the above can open you up to liability risk and financial penalties not to mention significant discomfort for occupants. If you’re not prepared to manage it all, you will need to sell. And if your home is in Winnipeg or anywhere in Manitoba for that matter, you will want to do so before the next winter when upkeep and subsequent costs grow exponentially.
How to Sell On Your Own
We know that you’re in a bit of a panic. It’s natural and we see people in your position go through it often. You know that you need to sell and you need to sell fast. But you also know that because of recent Winnipeg market trends selling in time to avoid digging into deeper into debt seems impossible.
Can you afford to let your house sit on the market for six months, a year, or longer? Given that you went online and searched for information about this topic, probably not. And this is why you simply cannot go the traditional route for selling the home (i.e Realtor) you were recently burdened with in your settlement. The older and/or more run down the home, the longer it will sit on the market. This stress is compounded further by the fact that buyers in Winnipeg tend to by homes that have been on the market for 30 days or less.
Thankfully there is a saving grace, one more effective that your divorce lawyer apparently was. If you reside in the greater Winnipeg are you can sell your home at market value and get paid in cash. Even better, you may even get the money out of your home sale within a week. You can then take that money (assuming no outstanding mortgage) and apply it to a condo more appropriate to your situation. From there, you will be free from the shackles of a marriage gone bad and will be ready to be reborn as the single self-sufficient star you are. It all starts with a simple phone call. Contact 5 Day Cash Offer at 204.222.0022 today.