The real estate market in Texas recently has seen quite a few changes over the last decade. Prices surged in recent years, but the markets have significantly softened in recent months. Higher interest rates have reduced demand in some markets, driving prices back down in many places.
Depending on when someone buys their home, as markets change, they may sometimes find themselves with an underwater mortgage. This term refers to a scenario where individuals owe more on the principal balance of their mortgage than the home would currently fetch on the open market.
People who buy when prices are high may not be able to sell without taking a loss. Are you trapped in your marriage if you don’t have very much equity in your home?
For many people, taking the loss may be worth it
It’s easy to tell yourself that you will just wait to make any big changes until financial or economic circumstances change. However, there’s no way of knowing how long it may be before the market reaches a point where you can recoup your investment.
If you feel strongly that it is time for you to file for divorce, then the current fair market value of your home should not be the main consideration for that decision. However, if you feel strongly that it is not the time to sell the property, you may be able to integrate that into your property decision settlement. There are numerous ways for spouses to handle their home that don’t involve immediately selling it when facing divorce.
Identifying and properly handling your most valuable assets can help you reduce the financial consequences of your divorce.