Life is never the same after a divorce. Not only do you lose a spouse, but you also lose the support and partnership you may have had during that time. More importantly, it is common to face financial challenges after a divorce. The income that you used to share is now split between two households. Moreover, all your possessions, assets, and even debt acquired during the period of marriage are divided.
The largest financial asset that often becomes a contention in a divorce is the marital home. You need to figure out whether to sell the property or which party gets to keep the house. The process can be emotionally exhausting and involving lots of legal wrangling. If you end up conceding the house, you may need to find a new place to live.
It, therefore, makes sense to start looking for a new home to buy. But, before you can get yourself into more financial trouble, you need to ensure that you are ready to own a new home. So how do you tell that the timing is right?
When You are Done with The Divorce Process
When still going through the divorce process, buying a house may not be a good idea, especially if you live in a community property state. Any property you purchase before you are officially divorced may become community property. Therefore, your spouse can claim it.
Moreover, when applying for a home loan, you need to have paperwork that clearly shows that your debts are split from those of your spouse. Your name should not be listed on debts that are no longer yours.
When Your Income is Sufficient
The mortgage you can receive as a couple is quite different from that you can get as a single earner. Before committing to purchasing any property, take a good look at your income, and figure out the mortgage type that you can comfortably settle.
In case you agreed on selling your marital property, you may want to consider using the profits as a down payment on your new mortgage. You can also choose to set it aside as an emergency fund. As a single parent, you are always a step closer to financial trouble regardless of having a stellar income. It is only right to ensure that you have enough financial security.
If you can Provide for Your Child Without Child or Spousal Support
The court may require your ex to provide you with a child or spousal support. But what happens when they refuse to pay or face financial difficulty? It is not a good idea to always rely on the child or spousal support you may be receiving. The moment it is withdrawn, you run into financial difficulty. The same happens when you choose to purchase a new home. You may find it hard to support its payment and still meet your financial obligations.
Instead of drowning in a financial dilemma because your ex fails to meet their financial responsibility, ensure that you can afford to buy a house without having to include a child or spousal support payment.
On the other hand, if you pay for child support, ensure that you can afford a mortgage even as you meet your financial obligations. You do not want to find yourself in a situation where you are figuring out which of the two you may have to skip.
If You Have a Good Credit Score
After a divorce, it is crucial to close down any joint credit cards or bank accounts. Unfortunately, the closure can negatively impact your credit score if it has a negative balance. As a result, taking out a mortgage may be a problem. The lender may decline your request, or you may have to pay a very high-interest rate.
Therefore, after a divorce, you should first take the time to rebuild your credit score before thinking about getting a new home. Take your time and do not rush the process. Any mistake you make can cause you even more damage.
If You Have Debts Inherited from The Divorce
During your marriage, you are most likely to collect several marital debts such as a mortgage, credit card bills, and car payments. During a divorce, these debts are divided between you and your spouse.
It is only wise first to evaluate all your debts and clear them before thinking of getting new property. A low debt to income ratio will increase the chances of a lender approving your mortgage.
Both men and women can experience financial loss after a divorce. It can be incredibly challenging during the first-year post-divorce. If you are already making a good income and your spouse has the ability and willingness to provide support payments, then you may hardly feel any financial stress after divorce.
However, if you are not financially prepared to live as a single parent, you need to find ways to supplement your finances and regain financial independence. Only then can you comfortably consider purchasing a house.
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