Many divorcing couples decide to sell the family home and split the proceeds. If you are in the market for a smaller place like a condo or townhouse after your divorce, you'll likely need a mortgage to be able to afford it.
Obtaining a mortgage based on your own credit record and income can be a challenge for many newly-divorced people. It's important for those who are about to be single again to consider what mortgage lenders and other creditors will be looking at as they negotiate their divorce settlement.
Your credit score will be key. However, if you had joint credit cards and loans with your spouse (as most married people do), your credit score may have taken a dip if your spouse was less than timely in making payments. Even if that wasn't the case, you never know what your estranged spouse will do once you're no longer together. He or she could start neglecting payments or rack up debt on cards that you're also responsible for.
That's why it's essential to know exactly what debts you have when you divorce so that you can divide them fairly and then extract yourself from joint debt as soon as possible. If your spouse is keeping the family home that you have a joint mortgage on, and you plan to buy your own home, it's probably going to be necessary to get your name off the mortgage. Your attorney can provide essential guidance on dealing with your joint debt.
When you're seeking a mortgage, lenders will also look at your income. If you're receiving spousal and/or child support, these are considered income for their purposes. However, you will likely have to show that you've been receiving this support for at least six months. Further, you may have to show proof that it is scheduled to continue for at least three years. That's something to consider when negotiating your support agreements. This may mean agreeing to a smaller amount of support, but for a longer period.
For many reasons, it's often best not to make large purchases soon after your divorce. However, it's still good to think about your longer-term goals. Your Florida family law attorney can help you work towards a settlement that will help you achieve these goals.
Source: Florida Today, "Dyer: Avoiding complications from a divorce when home buying," Bobby Dyer, March 21, 2018