Things to Consider When Buying a Home After Divorce

Home Buying Process

Things to Consider When Buying a Home After Divorce

December 1, 2021

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The divorce process is never easy. In fact, the time dealing with divorce proceedings and attorneys can drain your physical and mental health. Even if you are ending the marriage amicably, there are a ton of details to sort out to prepare for your new life. Divorce brings many challenges and one of the biggest challenges comes when you decide to buy a house. If you are planning on buying a house after your divorce, here are some important questions you may want to consider before making a final decision.

6 Questions To Help You Decide What Is Best For You

1. Do you have the income to qualify for a mortgage loan?

You will need to qualify for a mortgage loan to buy a house, which is directly dependent upon your financial health and credit score. However, divorces can completely diminish your finances and destroy your savings.

For instance, if you have been previously managing your household as a two-income family, a divorce could mean you are now losing your spouse’s income, leaving you with a lower income amount to qualify for a home loan.

Also, if you didn’t work in your marriage or only worked part-time, you might not even get qualified for a loan because mortgage lenders look for steady employment when offering mortgage loans to potential candidates.

2. Do you have any assets or money in reserve?

Divorces are usually expensive, especially when a divorce attorney gets involved in the proceedings. When all is said and done you could be left with alimony and child support payments.

Most mortgage lenders require a certain amount of money to be in cash reserve in order to qualify for a loan. Although the exact amount you should have reserved depends upon the type of mortgage loan you are applying for, it’s recommended to have enough to pay for at least two months of the principal on a loan along with insurance costs, interest, and taxes. Also, you will need money for the down payment of the house.

3. Is the previous mortgage still in your name?

If the mortgage for your previous family home is in your name, the mortgage can negatively impact your ability to qualify for another mortgage loan. A key factor in eligibility for mortgages are the debt-to-income ratio. When your name is on a previous mortgage, your debt to income ratio can appear unbalanced which can affect how a mortgage lender views your application. It can also affect your credit score if your former partner misses mortgage payments.

You can solve this problem in two ways. You can either get your name removed from the mortgage by presenting the right documentation to the mortgage lender or by asking your spouse to get the loan refinanced (revising the terms of the existing mortgage or paying off the previous mortgage and starting a new one in their name), depending upon their financial situation after the divorce.

4. Do you have kids?

Schooling, extracurricular activities, and the logistics of co-parenting are all important to consider when you are going through a divorce with kids. They are also important to consider when you purchase a house after the divorce process is over.

For example, the school where you want your kids to study in the future or where they are studying currently can be a big determinant of where you would want to buy your new house.

5. Do you know a real estate agent you can trust?

Purchasing a house after a divorce is an entirely different experience from buying one when you are married. Considering all of the financial and legal obligations you need to fulfill, having a real estate expert can be extremely valuable to make the home buying process as smooth as possible.

A seasoned real estate professional will be able to assist you with the tax implications, mortgage qualifications, and they can find you a house best suited to your emotional and financial needs.

Negotiator Recognized Partners consist of some of the best real estate agents in the country. As a real estate expert, an NRP will put extensive effort into making sure you find the best house at the best price. Learn more about Negotiators here.

6. Do you have a new house checklist?

When you buy a new house after a divorce, you have different expectations than when you were buying a house as a couple because of the change in lifestyle and your personal preferences. Many of the features and details that were a deal breaker may not matter as much. An updated house checklist can help you discover what is important for you personally to have in a house rather than you and your former partner.

For example, you may prefer to move into a condo if you want to downsize post-divorce. Similarly, if you have kids and share their custody you may want to stay close and get extra space for your growing family.

Ready To Start a New Life?

Getting started again after a divorce can be taxing on your mind and body. However, for many, it can also be an opportunity to restart and shape your life into something better. Whatever the situation is, buying a new house after a divorce is just one of the many important decisions you will have to make to start this new phase.