{"id":4268,"date":"2024-06-19T08:15:11","date_gmt":"2024-06-19T12:15:11","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=4268"},"modified":"2024-07-22T09:03:39","modified_gmt":"2024-07-22T13:03:39","slug":"divorced-and-looking-for-a-house","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/divorced-and-looking-for-a-house\/","title":{"rendered":"Divorced and Looking (For a House)"},"content":{"rendered":"\n
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If you\u2019re newly separated or divorced, you could be shopping for a home.<\/p>\n\n\n\n

Letting go of the home you shared with your former partner leads to a series of steps: from the deed you shared, to a new deed. A deed to a home of your own.<\/p>\n\n\n\n

Here, we spot the issues for the newly single\u2026and looking<\/a>. <\/p>\n\n\n\n\n\n\n\n

Prepare for the effects of divorce on your ability to borrow.<\/h2>\n\n\n\n

This happens no matter how well the divorce court tries to ensure you live \u201cin the manner to which you\u2019re accustomed.\u201d After your split, your eligibility to borrow will be calculated based on your income alone.<\/p>\n\n\n\n

Getting a stream of support money from your ex? The lender will understand those funds as income, which boosts your loan eligibility. Of course, it\u2019s the reverse if you\u2019re the one making support payments.<\/p>\n\n\n\n

When home prices (plus mortgage interest rates) are elevated, mortgage sticker shock is real. But you\u2019re not alone. Divorces regularly send solo home shoppers into this competitive housing market.<\/p>\n\n\n\n

Consider a government-backed mortgage.<\/h2>\n\n\n\n

As a new divorcee, you might find the down payment too much of a hurdle. You might wonder if you\u2019ll need to rent instead, or even continue living with your ex.<\/p>\n\n\n\n

But don\u2019t despair. Look at the option of a government-backed loan. A popular loan among single people and people buying modest homes is the FHA mortgage, backed by the Federal Housing Administration. These loans have inclusive eligibility rules. And FHA applicants with healthy credit histories can put down just 3.5% on the price tag for a new home.<\/p>\n\n\n\n

If you\u2019re self-employed, can you <\/em>qualify for an FHA mortgage<\/em><\/a>? Take a look.<\/em><\/p>\n\n\n\n

Take yourself off the prior mortgage loan.<\/h2>\n\n\n\n
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If your ex keeps your former home, you can get off of the former mortgage by being released by the mortgage company, or\u2014more likely \u2014 refinance that shared mortgage so that it\u2019s now in your ex\u2019s name only.<\/p>\n\n\n\n

What happens here should be stated in the divorce decree. Is the court directing your ex to make payments, going forward, for a home loan you once shared? That does not <\/em>automatically take your name off that mortgage. The lender needs to agree to take you off.<\/p>\n\n\n\n

If your name stays on your prior mortgage, and your ex doesn\u2019t make the payments, you\u2019ll be on the hook \u2014 although the divorce court can <\/em>order your ex to repay you. But that\u2019s an incomplete solution. It\u2019ll be hard to get a new mortgage while you\u2019re still on the old one.<\/p>\n\n\n\n

Take your name off your former home\u2019s deed.<\/h2>\n\n\n\n

Ask your divorce lawyer if signing the home over to your ex, and the method to do this, will appear in your divorce decree.  If your ex is keeping the home, a quitclaim deed (see available forms<\/a>) is the simplest way to transfer the title of the home to your ex.<\/p>\n\n\n\n

Depending on your state law and your specific settlement document or divorce decree, a quitclaim deed can be used to change a home\u2019s joint ownership into sole ownership. \u00a0<\/p>\n\n\n\n

In short, if you\u2019re refinancing your mortgage into the name of your ex only, it\u2019s time to update the home\u2019s title.<\/p>\n\n\n\n

Learn more on Deeds.com about <\/em>divorce and quitclaim deeds<\/em><\/a>.<\/em><\/p>\n\n\n\n

If you\u2019re selling the former home, know how much home equity you\u2019ll have.<\/h2>\n\n\n\n

Your divorce decree will lay out how you\u2019ll allocate the value of the home between the joint deed holders<\/a> if you sell.<\/p>\n\n\n\n

Home equity is your portion of the home\u2019s value, once the mortgage debt is resolved.<\/p>\n\n\n\n

When a couple sells their home to liquidate its value, then closing costs and fees, including the appraiser\u2019s fee, will also be subtracted from the equity you receive. Other costs of selling your former home include repairs and the cost of the real estate agent\u2019s work.  <\/p>\n\n\n\n

When a homeowning couple breaks up, both need to know the options for changing the deed<\/a>. Learn more with Deeds.com.<\/em><\/p>\n\n\n\n

Find a real estate agent who will work hard for you.<\/h2>\n\n\n\n

Finding the right professional to help you buy your next home matters. A good agent can smooth out the rough edges as you deal with the double whammy of divorce and home-seeking. An experienced, local professional can give you pointers so you learn the process of getting a mortgage during a major life transition.<\/p>\n\n\n\n

Choose the right location for you (and your kids or anyone else who will be living with you). Ask your divorce lawyer for agent recommendations in the area.<\/p>\n\n\n\n

Friends who have successfully navigated the process can tell you about their experiences, and might have agent recommendations.<\/p>\n\n\n\n

Request pre-approval from the mortgage company.<\/h2>\n\n\n\n

Be ready to give your mortgage consultant a copy of your legal separation agreement and\/or court-issued divorce decree. A lender will need documentation of the assets, debts, and responsibilities you\u2019ll be bringing out of the divorce. Then the lender will let you know how much borrowing power is pre-approved for you.<\/p>\n\n\n\n

A few reminders for the newly single person in the loan application process:<\/p>\n\n\n\n