Owning your own home often provides a sense of security following the upside-down experiences of finding your way through the world of separation and divorce.
Since a marital home is often a couple’s largest financial asset, figuring out whether to sell the home or to allow one of the parties to continue to live in it after divorce can be an exhausting emotional tug-of-war that usually results in lots of negotiating and legal wrangling before a decision is finally made.
Are You Ready To Buy a Home After Divorce?
If you would like to buy a home following divorce, here are five things to keep in mind before you begin to move forward into the home-buying process.:
1. Is your name still on the marital home mortgage paperwork even though you’re no longer living there?
As a Divorce Strategist, I often see situations where due to the cost and hassle factors of selling the home or refinancing the home into one person’s name, the divorcing couple just avoids doing these altogether or they decide to put it off until a later date because of current housing market conditions or their own personal financial situations.
This can be risky in a number of ways. For instance, what if one of the divorced parties decides to file for personal Chapter 7 bankruptcy years after the divorce? If the person filing bankruptcy is still listed on the mortgage paperwork as co-owner of the marital home, the bankruptcy trustee can force the sale of that marital home in order to pay back all of the divorced person’s creditors- even if it has been many years since the divorce took place and the bankrupt person no longer lives there.
In addition, a divorce person’s credit rating is also highly impacted by still being part owner of the marital home and may lead to a divorced person not being able to qualify for a new mortgage loan for their own home due to the high level of overall debt load still showing up on their credit report.
2. What does your financial situation look like?
Have you been in the same job for several years?
If you are self-employed do you have at least 2-3 years of self-employed income tax returns together to provide a history of your income to a mortgage lender? After the 2008 housing meltdown, proving that you have sufficient and stable ongoing income is essential to qualifying for a mortgage loan at a competitive interest rate.
3. Do you have some cash reserves set aside for the up-front costs of buying a home?
Typical costs that home buyers need to pay for include a down payment, earnest money deposit, home inspection, appraisal, title company closing costs and the expense of moving your household goods into your new place.
4. Are you ready to be flexible about the kind of home you can afford to buy?
Have you seriously thought about what are the five most important things that your new home must have? Does your new home wish list match up with the price of homes where you prefer to live? Could you expand the area you are looking in if this would help you to purchase a better home for the money?
5. Do you have a trustworthy real estate team to provide representation and guide you through the home buying process?
All real estate agents are NOT ALIKE!
I remember quickly choosing a Realtor at a nearby real-estate office when I decided to purchase my very first home. When the home inspection report showed some serious concerns, this Realtor sided with the sellers and did not advocate on my behalf regarding needed repairs.
I ended up not going through with the home purchase and lost my earnest money deposit in the process which was both unnecessary and extremely frustrating.
Now that I work as a Realtor and Buyer Specialist, I provide exclusive representation to buyers so that they can be assured that their best interests are fully represented throughout the entire process of purchasing their home.
Nancy Kay is both a Divorce Strategist and Home Buyer Specialist in Columbus, OH. You can reach Nancy at (614) 595-6056 for a free 30 minute consultation.