When you go through a divorce, one of the many questions you may ask yourself is where you’re going to live. Of course, the option is always there to remain in your home. For many divorced moms whose children are still in school, this is the option that makes the most sense.
The goal in these cases is to keep life as steady as possible for them during this time of change, and keeping them in their same school, near their friends and support network, and in the home they know and are attached to might be in their best interest. However, this isn’t always possible, and every divorce is different. Let’s walk through a few of your housing options after you’ve gone through a divorce.
Selling Your Home?
Some people decide that selling their home is in both ex-spouse’s best interest. Mutually leaving your home and selling it jointly can help both of you get a start on this new season of your life, and you may be able to use the profits you split to leverage a new mortgage. Keep in mind, that profit splits on home sales as a result of a divorce aren’t always 50/50 – you’ll need to consult your lawyer and negotiate terms with your ex-spouse.
Buying Out Your Spouse
Although there are times when an ex-spouse willingly moves out of your home so that you (and any kids you two may have together) can continue living there, things don’t always go this smoothly. Sometimes, you have the option of buying your spouse out of the mortgage and taking full ownership of the home. This can be risky unless your income can support the full cost of the mortgage. Before making this type of a move, you should consult with a financial planner. Taking on a hefty mortgage on your own could potentially negatively impact your credit score if it maxes out your debt-to-income ratio as a newly single individual.
A word of caution here – I find that many clients I speak to who are going through a divorce have an emotional attachment to the home they shared with their ex-spouse. It may be that it’s the house that their children grew up in, or that they have poured a lot of time and energy into making it “home.” However, many people who could comfortably afford their marital home while they were married can’t afford to continue to keep it, pay the mortgage, pay insurance and taxes, and still have enough funds left over to live a fulfilling lifestyle. Make sure you evaluate the financial side of the equation before you commit to buying out your spouse and keeping your marital home by yourself.
Buying a New Home
Of course, you also have the option of buying a new home after your divorce. This may be a given if you and your ex have mutually decided to sell the home you shared, but it can be a challenge to purchase a home on your own. This is especially true if your credit is less than perfect, or if your spouse made significantly more than you did and contributed to your family finances accordingly before your divorce. Typically, it’s wise to take some time after your divorce to take stock of where you stand financially.
Sitting down with a financial planner can help you organize your finances and move forward accordingly. You may have to adjust your expectations of home ownership or downsize to a home that you can comfortably afford on your own. This doesn’t have to be a negative thing, though. Instead, view your home shopping as an adventure – you’re finding a new space that’s perfect for you and your family.
Renting v. Buying
In many cases, it makes sense to take some time before jumping into a new home purchase after a divorce. You want to make sure that the moves you’re making are emotionally healthy for both you and your kids, if children are part of your equation. Taking an extra year or more before buying a home can give you time to build your credit, let the dust from your divorce settle, take stock of your finances, and get a better understanding of your monthly cash flow needs and savings.
While you wait to buy, there are many rental options that could be a good fit for you. If you want to save a notable amount for a down payment, or want to chip away at debt you’ve carried out of your divorce, downsizing to an apartment or townhome (if it meets your lifestyle needs) might make sense to save money each month. However, there are often houses available for lease in the Atlanta market, as well. Going from home ownership to renting isn’t always easy, but if it helps you to achieve your long-term financial goals, it could be well worth it.
Weigh All of Your Options
Don’t feel pressured to purchase a home immediately after (or while you’re still going through) your divorce. Only you will know when you’re emotionally ready to move forward and buy a home of your own, even if you’re already financially ready. And don’t think that just because you’re experiencing this time of change you need to jump into the first house that seems like an okay fit. You deserve to find the perfect home that meets your lifestyle needs.