Budgeting for House-Related Costs During Divorce

Richmond Divorce AttorneySince determining the value of the marital estate is an important part of ending the marriage, it is vital to create a budget that sets out what the spouses possess less what they owe to creditors.

What to Consider
Each of the individuals involved will need to set up at least one budget, perhaps more than one. The following information should be taken into account by both you and your lawyer as you consider expenses related to housing:

Occupancy Costs
Unless the couple owns their residence outright, there will be mortgage payments or rent to be considered. In the case of a homeowner, the calculation will include the mortgage payment on one spouse’s current budget. It will not appear on both. 

This method of calculating expenses- not dividing the mortgage between the spouses- is preferred, in order to keep matters straightforward for the lender. To prevent any misunderstanding and maintain accountability in case of missed payments, one person should be responsible. A budget outlined for after the divorce will estimate future costs for housing such as rent or the purchase of another house.


Utility Expenses
Records of past utility figures will normally be part of the budget developed by the person who will continue to reside in the family home, with no change in the budget to be put into effect after the divorce. The departing spouse will need to estimate his/her utility costs in order to develop a budget.

You may need to contact your utility company for information on average general utility expenses that may be in effect for possible rental properties or homes for sale. A precise figure may not be available due to the various changes that may occur during divorce when changing places of residence. In such cases, a sensible estimate may have to do.