Figuring out your housing situation after a divorce can be overwhelming. We have a few tips to help you get through it as smoothly as possible.
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If you're buying a home after a divorce, you'll want to go through the process a bit differently. Your financial situation might be very different, so we have some tips to buy a home as a single person as painlessly as possible.
First, check your budget and check it again. A loan pre-approval or pre-qualification gives you the maximum amount you can spend on monthly house payments and includes a good faith estimate which includes property taxes and insurance. You don't need to spend the maximum amount you qualify for, and as a newly single person, you don't want to end up house poor.
Secondly, you need to consider what's really important.
Moving down because of new financial realities might not sound like a picnic, but overextending your finances just to stay in one area or a similarly sized house can be worse. You'll probably have less buying power, which will limit your options, so you have to be realistic about what you can have. Be realistic with yourself about what you want and what you need, like being in a certain school district or living a certain distance from your work.
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Removing your name from your current mortgage drastically improves your creditworthiness.
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If you're in the divorce situation, consider getting your name off of your current mortgage. This helps improve creditworthiness because in a mortgage lender's eyes, you're still liable for that mortgage unless you sell the house or refinance. This helps provide stability when you go to purchase another home. Being newly divorced, you might not be ready from a savings standpoint and you might have financial obligations like credit cards or investments. These things can keep you from rushing into a new home, even if you want to. Many lenders also won't let a divorced person receiving alimony as evidence of income until there's a solid history of those alimony payments being made on time. Remember to keep in mind that buying a home is a big maintenance undertaking, which is amplified when you're the only owner. Feeling an urgent need to move can be very real, but you don't want to bite off more than you can chew, especially after the emotional turmoil of divorce. I hope you find this information helpful if you're going through a rough spot in life. If you'd like to have a further conversation about your unique situation or you need some guidance, don't hesitate to reach out to me. I'm here to help.
