For a lot of parents, owning a home that our children can grow up and make memories in is a cherished dream. Divorce can change that. You might have to sell the family home, allow your ex to take over the payments, or in a worst-case scenario, let the bank foreclose on it.
This is why it makes sense that you might start thinking about buying your next home before you’re even officially divorced. It can be a long process to go from thinking about buying a home to moving into a home you can call your own. But before you make that leap, you should consider a few things to make sure you don’t get yourself into bigger financial trouble.
Take your time and think hard about the answers to the following questions to make sure you’re ready to buy your next home post-divorce.
Where are you in the divorce process?
This might be one of the most important questions. If you’re still legally married and working your way through the divorce process, it might be a bad idea to buy. Depending on your state’s laws, buying a home before you’re officially divorce may make that home community property and thus give your soon-to-be ex a claim to your new home.
And even if you are officially divorced, it might be too new. Applying for home loans requires showing a lot of paperwork, including court orders that indicate who took on which debts in the split and that your name has been removed from debts that are no longer yours. If you don’t have that paperwork yet, it’s not a good idea to start trying to get a mortgage. Wait until you have that paperwork in hand.
Are you still named on the family home’s mortgage?
If your name is still on the mortgage from your marital home, a new lender may need to consider that loan as one of your debts. Even if your ex has agreed to take on those payments, the lender may need a court order that says that before they’ll be able to exclude that loan from your debts.
It’s also important to note that some people have found themselves on the hook for mortgage payments their ex agreed to take on even with a court order. This means if your ex decides to just stop paying that mortgage, if your name hasn’t been taken off, you could find yourself responsible for those payments even with the court order.
What’s your income look like?
There can be a huge difference between the mortgage you can get as one-half of a couple and the one you can get when you’re a single earner on your own. It would be a good idea to take a good hard look at your income and crunch some numbers to see what kind of mortgage you might be able to get before you start saving dream homes for sale on a Pinterest board.
If you agreed to sell the marital home and split the profits, you might want to consider whether it’s a better idea to use that money as a down payment on a new home or to create an emergency fund. As a single parent, financial trouble is one step closer even when you have a stellar income. It’s always a good idea to make sure you’re protecting yourself financially in the best way possible.
Can you afford to buy without including child or spousal support?
While you may have a court order that says your ex needs to pay child or spousal support, getting that enforced if they choose not to pay or run into financial difficulty can be very hard. So when it comes time to buy a new home, you should make sure you can afford it without including child and spousal support payments. You don’t want to end up drowning because your ex doesn’t live up to their financial responsibilities.
On the flip side, if you are the one who has to pay child or spousal support, you should make sure you can afford a mortgage payment while still paying those obligations. You don’t want to find yourself in a situation where you’re tempted to skip a child support or alimony payment to keep the roof over your head.
What does your credit look like?
Usually in a divorce, joint credit card and bank accounts are closed out. Unfortunately, the closing of joint credit cards can cause your credit score to take a hit — sometimes a pretty significant one. And if your credit score dropped, that could have a huge impact on a potential mortgage. You might have a higher interest rate or be declined altogether.
You may need to spend some time getting a new credit card or two and rebuilding your credit before you go in search of a new forever home. Don’t try to rush this part of the process because you can end up causing even more damage to your credit by trying to get a mortgage too soon.
What kind of assets do you have?
Ideally, you’ve got an emergency fund, a retirement account, and some extra savings on top of that. If you want to buy a house, you’ve got money for a down payment as well. You don’t want to close out a retirement account or cash out investments just to buy a house if you can avoid it — you shouldn’t spend your future funds on the present moment.
If you don’t have any of that, buying a home may not be in your or your children’s best interests right now. Take some time to build your savings, save up toward a down payment and be sure you’re fully prepared financially.
What debts did you inherit in the divorce?
Some things, like student loans, will stick with the person they belong to. But others, like the mortgage, car payments, and credit card bills, are often considered marital debt and end up getting divided between the two spouses. Before you start planning on your new home purchase, it’s a good idea to sit down and evaluate exactly which debts you got in the divorce, as well as what other debts you’ll have going forward.
Lenders use a debt-to-income ratio to decide whether to give you the mortgage, and the lower your ratio, the better your chances of getting approved. Even though you may be able to comfortably afford all your debts, it might be a good idea to figure out your debt-to-income ratio before you get your hopes up too high.
Can you afford new appliances, furniture, etc. when buying?
Debts aren’t the only thing that get split in a divorce. You usually also have to split the furniture, pots and pans, and all the other things that make up a home. And when you move into a new home, you might find that it doesn’t even come with appliances. So you need to know if you can afford to buy all the things you’d need to get that new house in living shape.
You’ll also still need to buy new clothes and shoes for the kids. Do the math now to make sure you can afford a new mortgage, furnishing a home and providing for the kids without needing to get a second, third, or even fourth job.
Are you sure you want to make that commitment?
Buying a home might seem like a natural step after divorce. You owned one before, you should own one again. But do you really want to make that commitment? There are several aspects to consider here. Aside from being responsible for all repairs and problems when you own, there’s also the fact that you’re locked in unless or until you can sell.
If your kids are older, you may want to reconsider. That four bedroom home might be great while they’re all living at home, but will you want something smaller and easier to care for when they’re all on their own in four or five years? Living near your ex is great now so the kids can see them, but will you still want to live that close after the kids are grown? Or would you rather be able to move somewhere else?
Don’t get ahead of yourself
After a divorce, it’s understandable that you want to return to a sense of stability as quickly as possible for both yourself and your kids. Buying a house naturally seems like one of the best ways to do that. But you need to make sure you’re not getting ahead of yourself.
What your kids will appreciate more than a house is a parent who is present, loving, and not stressing over how to pay the mortgage every month. And you can provide that, plus the stability you’re seeking, whether your home is owned or rented.
(Please note that nothing in this article is meant to be legal or financial advice. It is merely my findings and experience as a single parent navigating the world of home buying and renting after divorce. You should seek out the advice of trained financial professionals and/or lawyers to get specific financial or legal advice about your situation.)
Wendy Miller is a freelance relationship writer & meditation teacher. After years of settling for abusive and otherwise toxic relationships, she got fed up. Using meditation and other tools, she got to work on healing herself, setting boundaries, and only engaging in relationships (romantic and otherwise) that bring her joy. She wants to help other single parents find the love they seek, including and going beyond romantic love. She lives in Florida with her two sons, where she homeschools while solo parenting, while surrounded by what feels like a zooful of animals.
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