3 risks of co-owning a vacation home with an ex-spouse

If you love to visit the same place regularly, you and your spouse may have decided to purchase a vacation home. Like all marital assets, though, you must address ownership of the property during your divorce. Commonly, divorcing spouses sell vacation getaways and split the proceeds. That may not be right for you, though. 

Continuing to jointly own a vacation home with your spouse after divorce may make sense for a variety of reasons. For example, either you or your partner may not be ready to part with the home. Alternatively, you may have insufficient funds to buy out your spouse’s ownership interest. Either way, there are some risks of co-owning a vacation home with an ex-spouse. Here are three of them: 

1. The mortgage may harm your credit score

When extending credit, lenders usually consider an individual’s debt-to-income ratio. If the mortgage lists both you and your former partner, you may have trouble securing financing for other purchases, such as a new primary residence. Further, if your ex-spouse is late making mortgage payments, your credit score may suffer. 

2. Cooperation may be difficult

You may have fond memories of enjoying your vacation property with your spouse. After your divorce, though, you must take a businesslike approach. That is, you must negotiate usage schedules, house rules, upkeep costs and other matters. Unfortunately, fostering cooperation in a post-divorce setting may be challenging, even if your marriage was not acrimonious. 

3. Someone may want to sell 

If you choose to co-own your getaway, you can likely insert a clause into your divorce settlement that limits the ability of either party to sell. Nevertheless, your ex-spouse may change his or her mind about continuing to own the home. Further, your former partner may die, leaving his or her ownership interest to someone else. 

During your divorce, you have some options for addressing ownership of your vacation property. Before you decide to share ownership with your ex-spouse, though, you should understand the risks of doing so. Then, with some planning, you can work toward successful co-ownership.