Ready To Buy Property After Your Divorce: Here’s 7 Things You Should Know

Dissolution of marriage can be an unsettling experience for any partnership and family. With so much happening over the course of the divorce proceedings, which can take anything from 12 to 18 months to finalize, finding a new place to live for you or your family can only further complicate things.

Getting a divorce, or separating from your partner is not an easy decision to make, nor is it an affordable one for that matter. Data suggests that the average (mean) cost of getting a divorce in America is roughly $12,900.

What’s more, other statistics suggest that 50% of all marriages in the U.S. will end in either divorce or separation. Despite this large figure, America still has a much lower divorce rate compared to other developed economies.

Don’t be fooled, however, since the 1990s, adults over 50 years have seen the national average divorce rate rise, often linked to marital instability. Even more so, those aged 65 to 74 years old have a divorce rate of 39 percent, while those aged 75 years and older have a lower rate of 24 percent.

While the divorce proceedings can take months, even years to finalize, getting back on your feet, and starting from scratch could mean you will need to find a new place to live. And while buying a house was a lot easier with your previous partner, there might be some things you need to know first now that you’re going in on this by yourself.

Community property states

One of the first things you need to consider is whether or not you reside in a community property state. People that live in one of these states will need to cooperate with their spouse on the purchase of a new house.

The reason for this being is that under state law, in some instances, your spouse might have ownership of the new house even if you made the purchase. You will need to receive court approval to be able to purchase a new house, especially if there are marital assets involved in your divorce.

Things might even be more complicated in community property states, as state laws will consider your spouse’s debt as part of your debt, which can make it harder for you to find financing or be approved for a loan as it negatively impacts your debt-to-income ratio.

Community property states include; Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin,

Court proceedings for approval can take anything from a few weeks to several months, so it’s in the best interest of you and your family that you make sure you get approval from the court to purchase a house in your name before you need to start moving out.

Finalize divorce proceedings

If you are taking out a mortgage on your new house, your financial lender might require you to submit your legal separation agreement. For spouses that have a property settlement agreement, you will be required to submit that to your lender as well.

The reason why you need to submit a separation agreement is for lenders to see who in your agreement is responsible for what. This will help them determine what your debt-to-income ratio might be, which can influence your mortgage and the interest rate you are approved for.

For these proceedings, always ensure to submit a finalized copy that has been signed off by a judge. Additionally, you must ask your lender about all federal or state documents they might need to finalize your loan.

Quitclaim deeds

In case you do not live in a community property state, you might want to follow up with the local courts about who in your relationship owns what. This would mean that each individual is responsible for their separate assets or debts.

What a quitclaim deed does, however, is it allows the transfer of ownership of a property from one person to another.

This would mean that once you have clearly stated who owns what, you might need to receive compliance from your spouse if you’re going to buy a house while being still married but separated.

This would help establish the ownership of different assets, including any property, and that once the quitclaim deed has been signed by you, and approved by local courts, it will grant all interest transfers to you.

You might run into trouble if your spouse is not willing to sign a quitclaim deed, which means that even if you continue buying a new house, they will still be partial owners of the new property.

The quitclaim deed is a legal document that is often more applicable to married couples that end up separating but are still married while the proceedings are taking place.

Marital home mortgage separation

In case the marital home has been awarded to your spouse, you will need to ensure that you have been removed from the deed. Doing this you will need to sign a quitclaim deed, which helps to formally relieve you from the legal responsibility of the marital property or home.

Some states may allow you to use a quitclaim lease, while there may be other proceedings and filing needed to help finalize the mortgage separation.

Once you have been…