How to Buy a House While Getting a Divorce

Buying a house is already one of the biggest financial decisions you can make, and doing it in the middle of a divorce can add another layer of complexity. While you generally can buy a home before your divorce is finalized, the purchase could affect property division, mortgage approval and your post-divorce finances. Understanding these potential complications can help you decide whether buying now makes sense or whether waiting may put you on firmer financial footing.

A financial advisor can help you create a financial plan to buy a home while getting a divorce.

Can You Buy a House While Getting Divorced?

Yes, you can generally buy a house while getting divorced, but doing so can create financial and legal complications. Until a divorce is finalized, your income, debts and assets may still be considered part of the marital estate, depending on state law and the circumstances of your case.

One major consideration is how the new home will be classified during the divorce. A house purchased before the divorce is final could potentially be treated as marital property, even if only one spouse is listed on the deed or mortgage. The outcome can depend on factors such as when the property was purchased, where the down payment came from and whether marital funds were used.

Getting approved for a mortgage can also be more complicated during a divorce. Lenders typically review income, debts, credit and other financial obligations, and pending decisions involving alimony, child support or responsibility for existing joint debts could affect how much you can borrow. A jointly held mortgage on the marital home may also continue to affect your debt-to-income ratio until responsibility for that debt is resolved.

If you plan to buy before the divorce is finalized, it can be important to coordinate the purchase with your divorce attorney and mortgage lender. In some cases, a separation agreement, court order or other documentation may help clarify ownership of the new property and each spouse’s financial responsibilities.

Buying a home during a divorce can make sense when you need a new place to live and have sufficient financial resources, but waiting until the divorce is finalized may provide greater certainty about your assets, debts and post-divorce budget. A financial advisor can also help you evaluate how a home purchase could fit into your finances after the divorce.

5 Steps of Buying a House While Getting a Divorce

SmartAsset: How to Buy a House While Getting a Divorce

Buying a home can already be a complex process, especially if you’re selling your home simultaneously. There are five common steps you should consider if you’re thinking about buying a house while married but separated:

1. Talk to Your Attorney

Divorce and marriage law is extremely state-specific. When it comes to defining legal separation, every jurisdiction has a different definition. The first step you should take is talking to a divorce lawyer. They will be able to advise you on ways to keep any house you buy separately from divorce proceedings.

Purchasing a home while married but separated is complicated. Having a knowledgeable divorce attorney on your side can keep your new house from being a contested property.

2. See if You Live in a Community Property State

If you live in a community property state, you may need to cooperate with your spouse regarding your new house. Otherwise, under state law, your spouse would have ownership of the new house. Currently, there are nine community property states:

Arizona
California
Idaho
Louisiana
Nevada
New Mexico
Texas
Washington
Wisconsin

If you live in one of these states, you may need court approval to purchase a new house, especially with marital assets. Also, in these states, your spouse’s debt is your debt. This can negatively impact your debt-to-income ratio, which can make it more difficult to get a mortgage, and even harder to get a mortgage with a good interest rate.

3. Get Your Spouse to Sign a Quitclaim Deed

Even if you don’t live in a community property state, you want to it to be clear to the courts who owns what. That’s where a quitclaim deed comes in. Put simply, a quitclaim deed is a document that transfers ownership of a property.

You need the compliance of your spouse when buying a house while married but separated. To establish clear ownership, you will need them to sign a quitclaim deed for your new house, outlining that they transfer all interest to you.

If they won’t cooperate, you can run into a lot of trouble if you go ahead and buy the home. A judge could rule that your new home is half your spouse’s. While ultimately it’s your choice, if your spouse won’t sign a quitclaim deed, you may be better off waiting to buy the home until the divorce is finalized.

4. Plan for Your Purchase

Along with buying a house while married but separated, you still face the regular complexities of buying a home. That means you need to save for a down payment, have a solid credit score and pay down debt. Make sure to save your down payment in your own individual account, not a joint account. Remember, you’ll get a better interest rate on your mortgage with a higher down payment and credit score.

Before you start shopping, a good first step is to estimate how much you can afford. Using the SmartAsset mortgage calculator, you can get a good idea of how much your mortgage payment will be every month. For example, let’s say you buy a home for $500,000 and can put $100,000 down. You take out a $400,000 30-year fixed-rate mortgage at 6%. While estimating for taxes, insurance and other fees, this puts your monthly payment at $2,709.

5. Find a Real Estate Agent and a Lender

Once you have your credit score in a good spot and a sizable down payment, start looking for a real estate agent. Finding an experienced agent is invaluable. Look for one who understands your situation and the house you’re looking for.

As for lenders, it can pay to shop around. Check out our list of today’s best mortgage rates to familiarize yourself with what lenders are offering. Pay attention to additional fees and mortgage points. Remember that a super-low rate can mean you paying more cash at the closing table.

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Should You Buy a House When Married and Separated?

Buying a house while married but separated may be possible, but whether it makes sense can depend on your finances, state property laws and plans for divorce. Because you are still legally married, a home purchased during the separation could potentially be considered marital property, even if you intend to buy it without your spouse.

Before purchasing a home, consider how the down payment, mortgage and other housing costs could affect your finances during and after the separation. Existing joint debts, including a mortgage on the marital home, may affect your ability to qualify for another loan. Changes involving child support, alimony or the division of debts and assets could also alter how much house you can comfortably afford.

It can also be important to determine whether your spouse could have a legal or financial interest in the new property. State laws vary, and factors such as the source of the purchase funds, the date of separation and any prenuptial, postnuptial or separation agreements may affect how the home is treated.

Waiting until a divorce is finalized can make it easier to understand your post-divorce income, assets and obligations before committing to a mortgage. If you decide to buy while separated, consulting a divorce attorney about property ownership and a financial advisor about affordability can help you evaluate the potential consequences before moving forward.

Bottom Line

Buying a house while separated or going through a divorce is possible, but it can complicate property division, mortgage qualification and your overall finances. Before making a purchase, consider how state marital property laws, existing joint debts, the source of your down payment and potential alimony or child support obligations could affect the transaction. Waiting until the divorce is finalized may provide more financial certainty, while those who need or want to buy sooner may benefit from consulting a divorce attorney, mortgage professional and financial advisor before moving forward.

Financial Tips for Divorce

A financial advisor can help you create a financial plan for your needs and goals during and after your divorce. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re separated or going through a divorce, it may be a good item to open a new bank account. SmartAsset’s list of best banks can get you started on the right foot. Keep an eye out especially for banks with no fees and high APYs to grow your savings.