Buying a House After Divorce
Buying a house after divorce was my number one personal goal aside from caring from my son and getting back to work. I knew what it would take but it all seemed so far out of reach. For as much energy as my mind worked on this goal, it took a long time. There were many obstacles I had to overcome in the homebuying process. Here’s how you can buy a house after divorce with less headache.
Define Your Goals
Don’t just say you want to buy a house. Define why it’s important to you and understand what it will take. You may not be able to afford the same size or city that you owned a home while married. Get clear on your priorities so you can focus in on the goal.
For me, real estate was a huge trigger. Before I got married, I was already a homeowner. In fact, I was closing escrow on a second property to move into and rent my first one out when I got engaged. There was a minor problem at the end of escrow and my soon-to-be fiancé gave me his two-cents as an attorney: get out of the deal. I regretfully did.
We got engaged and married, and I rented out the first place until he decided that was too much work. I sold it – just before the real estate boom. Meanwhile, he owned the home we lived in, made sure to close escrow on the 18-acre weekend ranch before our nuptials to make sure I had no right to the property, ever.
By the time our divorce happened, I was a stay at home mom. That meant no income and when I got a divorce, prices had sky-rocketed. I could have done one of those “stated income” deals when they were still around and everyone was doing them, but I chose to be responsible. That meant the numbers weren’t in my favor.
When you have everything in place, get preapproved for the loan. A preapproval is different than a prequalification. Prequalified is a ballpark approval loosely based on your income and a few details you provide. Preapproval means the lender has looked at your credit, your income, your debt and all the factors to define how much he is willing to lend you. The only part left of the approval is the appraisal on the home in many cases.
As long as your situation doesn’t change, you should be good to go with the loan after a preapproval. Don’t mess it up by quitting your job or financing new furniture for the new home before the loan is closed.
This step was critical for me. I was self-employed. This is a traditionally difficult career type to get loan approval for. Working with a great lender is critical to figuring out how to meet the guidelines as a freelancer with one income.
Know What You Can Afford
Affordability is the big reality check for homebuyers. After a divorce, you are getting used to all sorts of changes in financial status. Often what you could afford during a marriage isn’t what you can afford after a divorce. For me, it wasn’t even what I could afford before marriage. Yet, it was important to me.
My son, though a toddler, had a certain lifestyle. We had a dog. We spent a lot of time in our backyard. I didn’t want that to change. I also didn’t want my son growing up living in a tiny apartment with Mom and bouncing from Bel Air to a country ranch with Dad. I’ll admit, it was a bit personal, especially since my ex made sure I had liquidated property long before the divorce.
Finding out what I could afford was depressing at first. I couldn’t afford anything in the Southern California housing market during the boom. Not even a small place in a less-than-desirable area. Realistically, my savings was paying for my divorce and that quickly became debt as we fought a two-and-a-half-year court battle. Though the house was a priority, affordability wasn’t there. Not yet.
Determine Your Location
When you know what you can afford, you can start to narrow things down to location. Finding the right location that you feel will be a good place to raise your children and call home is important. If you can’t afford the perfect spot, you’ll need to be picky about schools and community safety. It doesn’t make sense to buy a home in a place you don’t enjoy living or people don’t want to come to visit.
My court order required me to remain close to our marital home. That was fine. It was close to my friends and my son’s playgroups. Even though I was renting at first, I lived where it would be conducive to my son’s upbringing and somewhere I hoped to buy. It wasn’t Bel Air but it was in a nearby community with great schools and close to friends. I felt safe with my son and my dog even though it wasn’t perfect.
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Think About Costs Beyond the Mortgage
Buying a home comes with costs beyond the mortgage. Keep these in mind as you shop. Sometimes a condominium isn’t a great deal if the HOA fees are several hundred dollars per month. Find out what the yard maintenance costs are as well as anything like pool maintenance or home repairs.
Remember that when you are the homeowners, you don’t call the landlord when the toilet gets clogged. Either you are the plumber or you call and pay for one. There is no other way around that. These were all thoughts centered in my mind as time went on and we still were renting. I’d go to open houses, watch DIY shows and price out projects. It seemed like a silly habit considering I wasn’t yet close to realistically buying.
Take Care of Credit
Your credit score will be the foundation for qualifying for a mortgage and getting the most favorable, thus affordable rate. Learn your credit score (as scary as it might be) and then learn to build it back up. You’ll need at least a FICO 520 to qualify for most FHA or government-backed loan programs. Work with a credit repair agency if you need to. Just start taking care of it.
Things happen that we sometimes can’t change. I had a costly divorce and continued to be taken back for various things over the years. It put me in debt. And as Murphy’s Law often points out, what can happen will happen. As I started to get a handle on debt and grow my freelance career, an unexpected spine surgery popped up. It broke me – at least financially.
Save Up Cash
It is really hard to buy real estate without cash. I know there are a lot of real estate investment programs telling you that you can buy with no money down. When it comes to residential, owner-occupied home buying, you will need cash. There is a down payment that can be as little as 3.5% or as high as 20%. There are inspection fees and closing costs.
Plus, you have negotiation leverage when you make an offer with cash in hand. Sellers see you as a more serious buyer and lenders value your ability to save. How much cash is contingent on the home price and these vary not just from state to state, but from neighborhood to neighborhood.
A House Vs A Home
Anywhere you live with love and joy as a family is a home. We had moved a lot due to landlord issues. One was an elderly woman whose home was put into conservatorship. Another was pricing us out so they could develop condos. The last evicted us because he wanted to sell the place. It was never our fault, but it’s hard to have your home at the discretion of others people’s agendas.
The final eviction was the motivating force behind jumping in. There was a lot of stress in the process because I wasn’t quite ready financially. It was simply time to figure out a way. The market was hot and I got outbid on more properties than I can count. It still seemed so far away.
There was one day where my son was in his room and I was so frustrated and scared about our next move that I just started to sob. My head against the mantle trying to stifle my sobs so he wouldn’t hear. But he did. He came in, hugged me and after hearing why I was upset simply said, “Mommy, you always said that as long as we’re together, everything is fine. You’re here. I’m here. Arky is here.” Somewhere along the way, I still managed to keep his priorities aligned properly.
The Feeling of Winning
It took a long time for me to buy my home after divorce. The buying process was chaotic and I was a nightmare emotional mess. The day came; escrow closed. I was a homeowner again nearly a decade after leaving my divorce.
My real estate agent arranged for me to pick up the keys from his office; he was already in meetings for his next deal. I cleared my morning, grabbed my new house keys with a car full of my own little “housewarming” gifts to myself: a new comforter and sheet, some kitchen items and photo frame.
Pulling up to the driveway was surreal. All the years of dreaming about this and every little thing I did to make it possible with every obstacle that came my way were over.
One imagines winning with a big gleeful smile and doing the happy dance. Maybe I would have done that if someone else were there. My son was in school. Everyone I knew was working. There was no one to snap a picture of my standing in front of the house, putting the keys in the door or walking in.
It was just me. I entered. Everything was still and quiet. I walked through the house slowly, running my hands on the granite countertop. I made my way to my new bedroom, completely empty. I sat. I cried. Tears of joy. Contently alone. My son and I had our home.
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