Tips for Buying a House After a Divorce

by | Oct 29, 2021 | Buying

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Going through a divorce is considered one of the most stressful experiences a person can have. Post divorce, you might be ready to move on with your life and put the past behind you. Sometimes this can include purchasing your next home. However, when considering a big decision like this, it’s important to consider several factors before buying a house after a divorce.

Take ample time after the divorce

It’s easy to want to quickly jump into the next phase of your life and purchase a home. However, with all that recently happened, that may be a difficult immediate move.

Buying a house after a divorce is a big decision. Sometimes it’s better to rent for 6 – 12 months, since this offers flexibility. With that, it allows you to get past any potential emotional and financial speed bumps along the way.

Buying a house after a divorce: Finances

You should also take time to adapt to your new financial situation. Almost 50% of married couples both work and bring in income. So, a recently divorced person is likely going to have to learn to manage their finances with one income, which can be difficult.

One of the biggest factors in buying a home is your finances. Having these in order is going to help when the time comes. It’s important to ensure everything after the divorce is taken care of such as:

Expenses:

  • Attorney fees: Ensure all the attorney fees been paid for. Divorce attorney’s charge anywhere from $100 – $400 an hour with the average attorney fees costing around $12k.
  • Child support: If there are children involved, sometimes child support is required by the courts. This can affect your budget when applying for a mortgage.
  • Spousal support: Similar to child support, spousal support is sometimes required by the courts. Ultimately affecting a person’s expenses when applying for financing.

Investment Health:

  • Savings and investments: As you consider a home purchase, ensure that all the savings and investments have been divided appropriately. After divorce proceedings, you may end up with less than you thought. Of course this depends whether you are in a community property state or an equitable distribution state.
  • Debt-to-income ratio is sufficient: Going from a dual income to one income presents challenges. It’s important to assess the financial situation after the settlement. By doing so, you ensure there is a proper debt to income ratio to qualify for a home loan. In most cases, the highest debt-to-income ratio a person can have is 50%.
  • Credit score: Divorce often impacts credit scores. Ordering a credit report can help assess this situation.
  • Remove name from previous mortgage: When one person chooses to stay in the marital home, it’s important to ensure that the other person’s name is removed from the mortgage. This is done through a refinance and can be tricky because one person has to qualify for the mortgage on their own.

Choosing a new location

When your situation has become more stable, it may be time to start shopping for a house. First, pre-qualified by a mortgage lender to determine how much you can afford which will also determine in what areas you can purchase. This can be important for a variety of reasons and are different based on circumstances.

In addition to the circumstances presented by the divorce, there are common tips to follow when buying a house that can alleviate stress and increase the likelihood of being happy with a home purchase.

Additionally, it’s important to consider the various types of homes that are available. Does it make sense to have a house with a yard for kids to play in? Or does having a condo / town home seem more appealing?

Experienced divorce real estate agents

As with any real estate transaction, it’s important to consider real estate agents that have a lot of experience. Agents that boast high levels of yearly transactions have most likely encountered prior divorce scenarios, so it’s important to simply ask. A company like Trelora has done many 1000’s of transactions and has encountered divorce situations.

When in doubt, just keep renting

Again, if something doesn’t feel right about buying a home right away after a divorce, it’s important to consider renting for as long as needed. With all the potential legal and emotional issues from the divorce, buying a house might be difficult to handle right off the bat. It’s important for you to consider your options.

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The information contained in this blog is for general information purposes only, and while believed to be accurate, Trelora assumes no legal responsibility for accuracy. Information provided within should not relied upon as legal advice. Please consult with your local advisors for independent information regarding availability and applicability in your market.