Home Business Getting Ready to Buy Real Estate After Your Divorce: Here are 7 things you need to know

Getting Ready to Buy Real Estate After Your Divorce: Here are 7 things you need to know

by Ana Lopez
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Dissolution of marriage can be a disturbing experience for any partnership and family. With so many happenings in the course of the divorce proceedings, which can take 12 to 18 months to complete, finding a new place to live for you or your family can only make things more complicated.

Separating or separating from your partner is not an easy decision, nor is it affordable. Facts suggests that the median (mean) cost of a divorce in America is about $12,900.

In addition, other statistics suggest that 50% of all marriages in the US will end in divorce or separation. Despite this large figure, America still has a much lower divorce rate compared to other developed economies.

Don’t be fooled though, since the 1990s adults over age 50 have seen the national average divorce rate rise, often linked to marital instability. In fact, the 65 to 74 age group has a divorce rate of 39 percentwhile those age 75 and older have a lower rate of 24 percent.

While divorce proceedings can take months or even years to complete, it could mean getting back on your feet and starting all over again. And while buying a house was a lot easier with your previous partner, there may be some things you need to know first now that you’re going it alone.

Community property states

One of the first things to consider is whether or not you are in one state of community of property. People living in one of these states will have to work with their spouse when purchasing a new home.

This is because under state law, in some cases, your spouse can own the new home even if you made the purchase. You need court approval to purchase a new home, especially if your divorce involves marital property.

In community-owned states, it can be even more complicated, as state laws will consider your spouse’s debt as part of your debt, which can make it more difficult for you to find financing or get approved for a loan, as this is a has a negative impact on your debt burden. income ratio.

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

A court approval process can take anywhere from a few weeks to a few months, so it’s in the best interest of you and your family that you make sure you get court approval to purchase a home in your name before you have to move.

Complete divorce proceedings

If you take out a mortgage on your new home, your lender may ask you to submit your agreement of legal separation. For spouses who have a settlement agreement, you must also present it to your lender.

The reason you need to file a separation agreement is so that lenders can see who is responsible for what in your agreement. This will help them determine what your debt-to-income ratio could be, which could affect your mortgage and the interest rate you’re approved for.

For these procedures, always make sure to submit a final copy signed by a judge. In addition, you should ask your lender about any federal or state documents they may need to finalize your loan.

Stop claiming deeds

If you don’t live in community of property, you may want to check 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 well, it allows the transfer of ownership of a property from one person to another.

This would mean that once you’ve clearly stated who owns what, you might need your partner’s permission if you’re going to buy a house while still married but divorced.

This would help determine the ownership of various assetsincluding all property, and that once the quitclaim deed is signed by you and approved by local courts, it will award all interest transfers to you.

You could be in trouble if your spouse is unwilling to sign a quitclaim deed, meaning that even if you go ahead and buy a new home, they will still have partial ownership of the new property.

The quitclaim deed is a legal document that is often more applicable to married couples who eventually separate but are still married while the proceedings are taking place.

Marital home mortgage divorce

If the matrimonial home has been awarded to your spouse, you must ensure that you are removed from the deed. Doing so will require you to sign a quitclaim deed, which formally releases you from the legal responsibility of the marital property or home.

Some states may allow you to use a quitclaim lease, while other procedures and filing may be required to complete the mortgage divorce.

Once you are legally removed from the marriage mortgage, you can apply for new financing or start the loan application process for your new home. In addition, make sure to submit all legally required documents to your lender.

Have your finances divided

It is common for married couples to separate their finances after finalizing their divorce. Depending on whether you and your partner have agreed to marry inside or outside the union, your finances may be divided according to the legal agreements of your marriage.

In addition, you should check if your state has additional laws and jurisdictions regarding the distribution of your finances. In some cases, states may require you to share certain assets or debts.

Once you have divided your finances, you can present your credit score more accurate, which can then be used to apply for a loan or mortgage. Not dividing your finances can mean that your financial position is not accurately presented to lenders, which can make it increasingly difficult to get pre-approved or even approved for a mortgage.

Provide detailed monthly payment statements

Something many divorcees often leave out of their home loan application is whether or not they make monthly payments to their ex-spouse. All payments to an ex-spouse in the form of child support or alimony agreements should be included as part of your monthly debt.

Lenders will use these debt payments as a way to determine the loan amount and mortgage interest you will receive as part of the home loan application process.

Additionally, if you are in a position where you are receiving indefinite monthly payments from your ex-spouse, you should add this to your filing as it is generally viewed as test income. This information is also used to determine the loan size you may qualify for and the amount you can pay each month.

Use a broker

As someone who may still be going through a divorce, it may be a good idea to hire a real estate agent to help you find a suitable home that suits your needs.

Using a real estate agent will help you benefit in the short term, as it means they can search for the right property, without you having to scroll through an almost endless list of available real estate options in and around your area.

Even if you are not buying and may want to rent, you will still benefit from using an estate agent who can help you prepare all the ins and outs of rental properties for single-family homes in your own neighbourhood.

If you are considering moving to a new city or state, it is also best to hire a real estate agent who is knowledgeable about the local market, schools, amenities and nearby attractions.

it comes down to

Buying a house after your divorce is not as easy as it may seem from the outside, and it can take several months for everything to be approved and finalized, both from a legal and financial point of view.

From the start, make sure all your documents are signed by you and your spouse, and that a judge has signed any legal documents you may need to submit to a lender or real estate agent.

Once you have submitted the required documents and information, gone through endless real estate options and been approved for your new mortgage, you are finally ready to start a new life with your family.

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