Divorce is a part of many people’s life journey. As if the emotional ups and downs aren’t enough to deal with, many new divorcees have the daunting task of house hunting among other financial responsibilities. Here are five super important things to keep in mind in order to smooth the road to homeownership.
Consult the Right Professionals
Even if you have a “cut and dry” divorce, you should consult with an experienced divorce lawyer in your area. Many people make the mistake of consulting general practice lawyers, who may not be as versed in your state’s divorce law. In addition, consider enlisting help from a financial advisor! Divorces often require complicated financial calculations, such as projecting values of long-term assets. Mistakes and oversights could cost you thousands of dollars.
Get Off Your Current Mortgage
Remove your name from your current mortgage. Obtaining a new mortgage may be quite an uphill battle if you’re listed on your existing loan. The cleanest way to handle a home is selling it and splitting the proceeds. Refinancing your home is the best way to get your ex-spouse off of the mortgage if you plan to stay in your home and want their name removed.
Close Your Joint Accounts
Open your own bank account and close your joint accounts. Technically, if your ex-spouse’s bills are paid out of a joint account, then you may be held half responsible because of your “co-mingled” funds. This, of course, may pose big problems if you’re trying to purchase a home.
Use Alimony and Child Support to Qualify
If you receive alimony or child support, this income CAN be used to qualify for a mortgage if the income has been steady for the past six months and if it will continue for the next three years. Likewise, if you pay alimony or child support to your ex-spouse, this debt reduces your income and borrowing power.
Have Your Divorce Decree Available
Always have a copy of your divorce decree readily available – no matter how long you’ve been divorced. If your ex-spouse lives in and pays for your former home, then you need a copy of the divorce decree to prove you’re free of responsibility as you shop for a new home.
Be smart, be pro-active and don’t let your emotions get the best of you! House-hunting, like divorce, doesn’t have to be as difficult and costly as many people think. According to the National Center for Health Statistics, nearly half of all U.S. marriages end in divorce. So pass this info along if you know someone who is newly faced with “The Great Divide.” To learn more, visit DivorceSource.com.