Whether you’re trying to get a mortgage after divorce or considering it for the future, here are a few things to know about home ownership after divorce:
Your credit score may have changed.
Getting divorced is one of the leading causes of bankruptcy in the United States. Attorney fees, supporting a household on one income instead of two, and an ex’s inability or refusal to make payments on joint accounts can wreak havoc on your credit score.
Keep a close eye on your credit report if you plan to buy a home after divorce. Pay off or refinance joint accounts as soon as possible. When your name is no longer on joint accounts, it eliminates the chance of an ex’s inability to pay from harming your credit. It also keeps your debt to income ratio lower.
Even if your credit has taken a hit, that doesn’t mean you’ll never be able to qualify for a mortgage. An FHA loans at NLC Loans, for example, has less stringent credit and down payment requirements than a conventional mortgages at NLC Loans and could be a good option.
Your current home may be harder to maintain.
Even current home ownership changes after you’re divorced. If the family home was awarded to you in the divorce settlement, think carefully about whether keeping it is a wise decision. Maintaining a home is much more difficult on one income. Sometimes, it makes better financial sense to sell your home than try and keep up with the expenses.
Child and spousal support can affect home ownership.
Whether you’re making support payments or receiving them, child and spousal support will undoubtedly affect your ability to get a mortgage after divorce.
If you’re receiving child and spousal support payments, they are included in your income and can make it easier to buy a home after divorce. If you’re making support payments, however, the amount of money you’re able to borrow will be limited.
Buying a home after divorce might be difficult, but it isn’t impossible. Safeguarding your credit, making wise financial choices, and waiting to buy a home until your finances are secure will help you on your path to home ownership.