Due to record low interest rates over the last decade, many people were able to buy a home that was both large and affordable. When couple’s divorce, in my experience, one spouse almost always wants to keep the home with their affordable mortgage. However, there is much more to the cost of homeownership than just the mortgage.
Although this is something I have advised my clients on for the entire time I have been a divorce financial planner, Bankrate has published a recent analysis on the hidden costs of homeownership.
https://www.bankrate.com/mortgages/hidden-costs-of-homeownership-study/
According to this analysis by Bankrate, in 2024, a median U.S. home worth $436,291 will have an additional $18,118 of costs in addition to what is owed on the mortgage. In 2020, those same expenses added up to additional costs totaling $14,428. In my state of North Carolina, costs have increased 31% between 2020 and 2024 according to this analysis.
While most homeowners understand the additional cost of property taxes and homeowners’ insurance, there are other costs that are often not considered carefully enough such as rising repair costs, rising utilities, and the fact that homeowners’ insurance, especially windstorm and flood insurance, are rising very rapidly. In some areas, homeowners’ insurance has doubled in a year. The rise in construction costs since the pandemic has been a major contributor to the rise in homeowners’ insurance. Many homeowners can be hit with unanticipated HOA assessments, such as tree trimming and street paving.
In an article I wrote in April 2021, I discuss how the condition and age of your home will affect the annual cost.
https://therightdivorcesolution.com/articles/keeping-the-marital-home-what-is-the-condition
There are other factors to consider when deciding whether it is financially wise to keep the marital home as is discussed in my December 2018 article.
In summary, your marital home my have a low mortgage, but consider all the other costs before making the final decision to keep it in the divorce.
