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Buying A House After Divorce: What You Need To Know

Anna Baluch5-Minute Read
March 30, 2022

Divorce impacts many areas of your life, including your finances and your living situation. Whether you owned the home together or it was in one of your names, figuring out the mortgage, title and next steps can feel daunting in the midst of everything. If you’re figuring out the title or want to start fresh in a new space, these tips can help you navigate home buying after a divorce.

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Can I Buy A House After Divorce?

In short, yes. Once you’ve taken care of the legal and financial obligations associated with selling or transferring ownership for the home you previously co-owned with your ex-spouse, it’s entirely possible to purchase a new home on your own or with a new partner.

Let’s dig deeper into some of the preparations that should be made before your home buying process begins.

Buying A House After Your Divorce Is Finalized: 3 Steps To Prepare For The Purchase

After having to keep track of countless details during your divorce, it might seem a little overwhelming to then have to start the process of buying a new home. However, there are three steps you can take to simplify the early stages of your home buying experience.

Step 1: Look At Your Finances

It’s no secret that your standard of living may change after divorce. Take a close look at your finances and ask yourself if you can comfortably afford all home ownership costs by yourself.

You may find that your divorce had a negative effect on your finances, especially if you had joint accounts or if you put money on credit cards for legal expenses. You don’t want to buy a house and later find out you’re unable to pay for it and maintain the lifestyle you want.

Keep in mind these costs of buying a home:

  • Mortgage payment
  • Property taxes
  • Insurance
  • Home maintenance or improvements
  • Closing costs

After you consider at the basics, it’s time to take a look at some of those qualifying requirements that may have been impacted by the divorce.

Debt-To-Income Ratio

Your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income. Ideally, you want your DTI to be less than 50%. Unfortunately, a divorce may increase your DTI.

For example, if there’s a property settlement agreement and you’re liable for part or all of an outstanding loan, you can expect your DTI to go up. In the event your DTI is high, put more money toward your debt, avoid new debt, and postpone large purchases so you’re not using as much credit if possible.

Credit Score

Your credit score will help determine whether a lender will approve you for a mortgage. You’ll need a minimum score of 620 for a conventional loan and 580 if you go with an FHA loan. If your credit score is low, focus on increasing it. Pay your bills on time, keep credit card balances low, and only apply for new accounts if you absolutely need them.

With an improved credit score, you can increase your chances of approval and secure a home loan with a lower interest rate and more favorable terms. This could save you thousands of dollars over the course of your mortgage.

Step 2: Get Prequalified

If you do decide that you are financially ready to buy a home, before you start house hunting, go through the prequalification process. By doing so, you’ll know approximately how much home you’re approved for, and you won’t waste your time on houses that are outside of your budget. You’ll also position yourself as a more attractive buyer to sellers and real estate agents.

Once you’re prequalified, it’s wise to also get preapproved for a mortgage. During the preapproval process, lenders verify the information provided during prequalification and provide an even more accurate estimate for how much you’ll be approved to borrow. By going through these steps before fully starting your home buying journey, you’ll be setting yourself up for success and providing yourself with a clear sense of what properties your post-divorce finances will allow you to purchase.

Step 3: Choose The Right Location

Once you start house hunting, pay attention to location.

Do you have children who will be going back and forth between your house and their other parent’s house? If so, you may want a location that makes this more convenient. And what about school district? Do you want to keep them in the school district they were in before your divorce or take the opportunity to find a home in another school district? Keep in mind that school district is important when buying a house as it can also affect the resale value of the home.

You’ll also want to consider factors that could affect your lifestyle, like your commute to work, proximity to amenities you frequent and neighborhood preferences. Additional details, like the walkability of the area around your new home and the amount of yard space the property provides, can also be helpful to take into consideration.

Beyond these steps, the process of buying a house after getting divorced is essentially the same as buying a house under more traditional circumstances. As you begin this new chapter of homeownership, make sure you’ve carefully reviewed your state’s laws relating to divorce and property rights to avoid missing anything important. Also, conduct thorough research to ensure that you’re working with a knowledgeable real estate agent who understands your post-divorce financial situation clearly enough to show you houses that fit within your budget.

Get approved to buy a home.

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Buying A Home After Divorce FAQs

Buying a house after separation but before divorce: how does it work?

Buying a house while you’re legally separated but not divorced from your spouse is a little bit trickier than simply buying a house after you’ve completed your divorce proceedings. If you’re looking to buy a house after separation, you’ll need to provide the new mortgage lender with your legal separation agreement as well as a property settlement agreement if one has been created. It’s also important to review your state’s laws around purchasing property after separating from a spouse, as they may affect the timeline of your real estate transaction and any additional documentation you’ll need to provide.

Can I buy a house during a divorce?

Rather than buying a house during a divorce, it’s much easier to buy after. However, if you wish to buy a house during a divorce, check with your state laws. Some may require that you receive a court approval before proceeding. A divorce attorney in your state can educate you on the ins and outs of buying a house during a divorce.

What happens to a mortgage after divorce?

If you and your ex-spouse owned a home together while you were married, you have a few options for how to handle the mortgage after a divorce.

If neither party wants to stay in the home, you can agree to sell the home and split the profits. If one of you wants to keep the home, you may refinance the mortgage in that person’s name only.

Your personal preferences as well as the divorce laws in your state will dictate what happens to your house and mortgage after divorce.

How do I change the title of my house after divorce?

In the event that one of you decides to keep the house after divorce, you’ll need to get the other person’s name off the title and the deed. Fortunately, this process is fairly easy.

All you have to do is sign a quitclaim deed, which is a special document used to transfer property from one party to another. To obtain one, visit your local County Clerk or registry office. If you have further questions, don’t hesitate to consult a title insurance attorney.

The Bottom Line

If you’re confident that buying a house after divorce is a smart move for your unique situation, Rocket Mortgage® can help. Contact them today for more information. They’ll simplify the process and help you choose the ideal home loan for your budget and lifestyle needs.

Get approved to see what you can afford.

Rocket Mortgage® lets you do it all online.

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Anna Baluch

Anna Baluch is a freelance writer from Cleveland, OH who enjoys writing about all real estate and personal finance topics. Her work can be seen on LendingTree, Business Insider, Experian and other well-known publications.