Home Ownership and Financial Independence Post Divorce
As seen on The Rhode Show
Going through a divorce is enough of an emotionally and logistically difficult process to endure without considering the big financial questions left to answer. 70% of all divorces involve real estate transactions, so, knowing your options and having an advocate to see you through your transition to financial independence is essential.
Are you selling your home? Staying in your home? Unsure at this point in the process? The three steps newly divorced consumers should take in determining their best post-divorce options, include; connecting with a professional, knowing your home ownership options and acting with increased credit awareness:
STEP 1: Connect With a Professional
A Certified Divorce Lending Professional (CDLP) is informed in all areas of mortgage financing and real estate strategies for divorcing clients, and typically works alongside the divorce attorney in helping the consumer understand their options.
Whether a divorcee wishes to sell or maintain their marital home, a CDLP provides guidance and credit counseling, and advises on what they would qualify for, post-divorce. This information can be used in negotiating a settlement as well.
STEP 2: Know Your Home Ownership Options
There are three important considerations to make when determining if you can afford to retain your home after divorce:
First; determine if alimony or child support can be used as qualified income for a mortgage, especially for a stay-at-home parent.
Second; if you’re receiving assets from the divorce, you should determine how much you would be required to put down on a new home, if purchasing.
Third; if you are buying your spouse out of the equity in the home, you should determine what your new monthly payments would look like. Carefully, individually assess this option to figure out if it is viable and affordable.
STEP 3: Act with Increased Credit Awareness
As you determine what home ownership options will work best for you, it’s important to proceed with vigilant credit awareness to protect yourself and your finances as you move forward.
Taking steps to clear up any loose ends will help you protect your financial future & credit. Have your lender review your credit with you line by line to ensure if there are any remaining joint accounts. If so, have them closed or have yourself removed from them. Determine if you need to refinance any car loans or be removed from any loans.