Going through a divorce can be mentally, physically, and emotionally exhausting. Besides saying goodbye to your loved ones, you may need to find a new home to start over. A divorce can also stall your long-term plans. For example, you could have been contemplating buying a home before things started going south. Should you go ahead or shelve the dreams until things settle down?
Regardless of the situation, go ahead with your plans. Buying a house during a divorce is covered in the law. Read on for some things to keep in mind when buying a house during a divorce.
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Play it Safe Legally
Know what a quitclaim deed is? This is a legal agreement that your lawyer can prepare for you and your partner to sign. The agreement allows one party to make any investment or purchase, which the other party won’t lay claim to, as part of the divorce settlement. However, you will need to convince your partner to sign the quitclaim deed before proceeding to buy a house.
You may be tempted to use a third party, like a relative or a secret company, to purchase the home on your behalf. However, such purchases can be unearthed easily by a divorce lawyer and included as mutually acquired property, which means they will be part of the settlement. The best thing to do is to either convince your partner to agree to waive his or her rights on that purchase through the quitclaim deed or wait until the divorce to purchase the home.
Some states like California do allow you to buy a property or make purchases as a single person six months after divorce proceedings have begun. Before making any move, be clear about your partner’s claim as you prepare to make an offer on a house you wish to buy.
Consider Your Financial Obligations After Divorce
Settlements, child support, and alimony are some of the financial obligations that you need to consider when thinking about buying a house during a divorce. On top of that, most financiers will look at your creditworthiness with a different lens when a divorce is looming.
With that said, in some circumstances, a divorce can improve your mortgage offer. For instance, many underwriters look at individual debt and credit scores when dealing with married couples. However, some may consider joint obligations that might affect your creditworthiness.
Get an OK from the Court
If you are unable to sign a quitclaim deed with your partner or regain your single status in the middle of the divorce, consider getting court approval. In most states, those in the middle of a divorce can seek court approval to buy an asset like a home. Getting court approval is especially important if you are using what could be considered joint or marital assets to make the purchase.
Some divorce settlements can be unpredictable. For example, the funds you may have in your personal account may not necessarily be yours until the court says so. Your divorce attorney will advise you on when you might need court approval to spend what you might consider your own money.
Consider Other Expenses
A new home comes with extra expenses. For example, you will need to pay taxes and utility bills, furnish the home, and so on. Think of where you would get the money to cater for these new expenses on your own. Do you have a steady stream of income or credit?
Avoid dipping into any marital property or joint accounts for expenses related to your new home.
Why Buy a Home During Divorce
Most divorces are not pretty. Therefore, it is prudent to give your partner space and probably start planning to buy a house when things are beyond repair. Staying in the same house or a hotel might lead to unnecessary altercations or arguments, which can make the settlement even more complicated. Buying a home will prevent you from going back to your partner’s house or having false hopes that you might fix things and get back together.
If you can manage to get an approval or a signed deed to buy a house, go for it. You will have a place to call home and have peace of mind as you recover from the shock of the divorce. Where child custody is at play, it is important to have a permanent home so the court can consider your claims for custody. Anything that gives you leverage, like not being homeless, in a child custody case is welcome.
Many people have to deal with divorce at some point in their life. Getting a place to stay is probably the biggest worry you will have during a divorce. Don’t let the stress and exhaustion cloud your judgment as you search for a new home.