Splitting up is difficult for most people. The thought of remaining in your shared home may be too painful to bear. Or maybe you are simply ready for a completely fresh start. Before you contact a realtor about buying a new home, here is what you need to consider.
Like most other states, Oklahoma is an equitable distribution state. When you and your spouse divorce, your marital property is divided equitably, though not necessarily evenly. Marital property are the assets you acquired while you were married. If you try to buy a new home before your divorce is finalized, it is possible your new home will be considered marital property. This is especially true if you use marital funds to purchase the home.
Talk to an attorney
You may be able to buy a home before a divorce is final. However, you might need the court’s approval to do so. Do not go buy a home without talking to an attorney first. An attorney can advise you how to legally purchase a new home and ensure it is safe from property division.
It may be easier and wiser to wait until after the divorce is final to purchase a new home. Rent an apartment for a few months or stay with friends and family. More than your home being subject to property division, you also want to be financially prepared for a new mortgage.
Assess your finances as a single person
Before you buy a new home, you want to ensure you can afford it post-divorce. Go over your monthly bills and include all expenses like internet, electricity, car payments and credit cards. Do not forget to include variable expenses like what you spend on clothing and entertainment. As a home owner, you also should save money for maintenance, like plumbing problems or replacing a washer and dryer. Once you have a grasp on your monthly expenses, you will know if you can afford a mortgage payment.
Ensure all your finances are separated
Before you apply for a mortgage, ensure you have severed all financial ties to your former partner. Pulling your credit report will reveal anything you may have missed during the divorce. It is also important that you get your name of your former home’s mortgage. This could cause problems when applying for a new mortgage.
Evaluate your credit score
Your credit report also has your credit score. Most lenders want a credit score of at least 600 for a home loan. It will vary slightly considering how much money you have for a down payment and the kind of loan. If your credit score is lower than that, you might need to improve it before you can buy a home.
You can increase your credit score by paying down balances on your credit cards. You also need to pay all your bills on time. If you do not have a lot of credit history, consider opening a new credit card. This will help you establish more credit history. Just make sure you pay your bill on time, and do not get yourself into debt.
Check out multiple mortgage lenders
Once you have a separated your finances, established a good credit score and have enough money for a mortgage payment, start reaching out to mortgage lenders. You should be in a good position to get approved, but you do not have to settle on the first lender you contact. Some lenders may offer you a better interest rate than others, so shop around before you select a lender. A slightly lower interest rate makes a big difference over the life of a 30-year loan.
It is often wiser to wait until after a divorce is final before you buy a new home. You have a better picture of your finances and will not face complications regarding asset division. If you simply cannot wait to buy, talk to an attorney that is experienced in Oklahoma family law.