Divorce is never easy. Even an amicable, no-fault divorce results in a host of major life changes. You’ve gone from sharing a home and finances to being all on your own.
While you might settle into an apartment for short term housing, odds are good that you’ll eventually want to purchase a home again. If you bought your previous home while married, you probably qualified for the mortgage based on the combined income of you and your ex. Now that you’re single again, you’ll have to buy under your own name, on your own merit.
While the process can be tricky, we hope this guide to purchasing a home after divorce makes it a little bit easier.
You may have been sharing finances with your ex for years—both income and expenses. Take some time after the divorce proceedings have concluded to sit down and get a firm grasp of where you stand financially.
What does your savings account look like at the moment? Keeping in mind that a lot of the reduced down payment programs are meant for first time homebuyers, do you think that you can afford to put 20% down?
If not, take note of your fixed expenses (like rent, utilities, insurance) and the ones you have control over (entertainment, clothing, etc.). After you account for your income, how much surplus do you have leftover to put towards savings for a down payment? If it looks like saving would take longer than you hoped, adjust your variable expenses to make more room for savings.
Divorce often creates waves in your credit history. If you were a stay-at-home spouse, you might not even have a credit score. The worst situations involve unhappy splits in which one spouse sabotages another by maxing out credit cards or making other financially ruinous decisions before finances are completely separated.
If necessary, protect your score by ensuring that there are no accounts still tied to both you and your ex. If your score is poor, begin building it by paying down your revolving credit, keeping up to date with bills, and not overstretching yourself on new loans. Building up your credit might take months or years, but it will help you get the best possible mortgage rates and afford a home that you love.
Most importantly, with everything involved in buying a home after divorce, take your time. The last thing you want to do is rush a major financial decision during one of the most stressful and emotional times in your life. You could end up with a home you don’t really like or can’t truly afford.
There will always be new houses to buy in Denver, so don’t feel like you have to jump back into homeownership right away. It’s okay to rent or stay with a friend for a few months while you settle back into single life.
But when you are ready, Walden Novak is here to help. We’ve been pairing interested buyers with the home of their dreams in the Denver area for years, and we would love to help you do the same.