Being newly divorced is emotionally and financially challenging. Once the papers are signed and life starts to settle into the new normal, many people begin to think about their next chapter—including buying a house. 

If you’re thinking about your living arrangements, what you’re going to do next, and whether it’s even possible to get a mortgage, I’ve put together some tips and advice for the newly single. Whether you’re staying in the family home or looking for a fresh start, there are a few important things to keep in mind, including working with a mortgage broker to help make the process less stressful. 

Now That You’re Newly Divorced, Is It the Right Time to Buy?

After a separation, finances are usually tighter. If you’ve split the equity from your former home, you might be starting from scratch when it comes to a down payment. And if your credit took a hit during the separation, qualifying for a mortgage could be tougher than before.

That’s where working with a mortgage broker can be a huge asset. They’ll help you understand your borrowing power, find lenders that work with your situation, and guide you through pre-approval and discovering the perfect mortgage and options for your new lifestyle.

You’ll Need To Take a Hard Look at Your Finances

Before you start scrolling through listings, take time to figure out how much house you can afford — solo. Create a list of all your income and expenses. Don’t forget to factor in new costs like child support or alimony, along with housing-related expenses like property taxes, utilities, and insurance. Use the debt service calculator on my website to get started..

Working on one income is a big shift, so adjust your expectations accordingly. Once you know what your monthly housing budget looks like, you can start saving for a down payment and get pre-approved for a mortgage. Working with my mortgage calculator gives you a clearer picture of your price range and gets you started on the pre-approval process.

What Lenders Are Looking For From Newly Divorced Clients

If you decide to sell and buy a new home, you’ll need to qualify for a mortgage based on your individual income, debts, and credit score. You’ll need at least a 5% down payment. Lenders will assess your debt-to-income ratio, including any spousal or child support obligations.

If you’re receiving support, some lenders will count it as income—provided it’s documented in a legal agreement, and you can prove there is a history of receiving payments. When you’re applying for a mortgage, there are a few extra steps to take — but nothing you can’t handle. 

Get a Legal Separation Agreement

Lenders need to see a signed separation agreement. It shows how you and your ex are dividing property, who’s paying support, and what debts belong to whom. Without this document, getting approved for a mortgage will be very difficult — especially if kids are involved.

Check Your Credit

Divorce can affect your credit, especially if joint debts were missed or not paid off properly. Order your credit report from Equifax or TransUnion and check it for errors or open joint accounts that should be closed.

Deal With Joint Debts

Even if your separation agreement says your ex is responsible for a certain debt, lenders still see it as your responsibility unless your name is officially removed.

• Pay off or refinance joint debts into your own name.
• Close shared credit cards or lines of credit where possible.

Talk to a Mortgage Broker Early

It’s smart to connect with a mortgage broker before you start house hunting. A broker can:

• Look at your new financial situation and help you understand your borrowing power.
• Connect you with lenders who accept spousal or child support as part of your income.
• Help you improve your credit or reduce your debt so you qualify for better rates.

Save for a Down Payment

If you’re receiving money from a home sale or buyout, set some aside for your down payment. If not, start saving now — even a little at a time helps. The more you can put down, the better your mortgage options will be.

Legal Details You’ll Have To Worry About When Buying a Home

It’s a good idea to wait until your divorce is finalized before buying, if possible. This way, all joint debts and property are sorted, and your lender has a clear picture of your finances. If you’re still legally married, lenders may factor your ex’s income and debts into your application, which could complicate things.

What’s Involved If You Want To Keep the Family Home?

Some people choose to stay in the home they shared with their ex—especially if kids are involved. In this case, you’ll likely need to refinance the mortgage in your name alone. This depends on your income, credit, and how much equity is in the home. A mortgage broker can help you figure out if that’s realistic, or if selling and buying something new is a better option.

If your ex is on the title or mortgage, removing them requires paperwork like a quitclaim deed and refinancing your current mortgage. It’s a bit of a process, but it’s doable with help from an experienced mortgage broker.

If You’re Newly Divorced, I Can Help You Find The Best Mortgage For Your Next Living Situation

Buying a house after a divorce or separation can seem like one big thing piled on top of another. Although there’s no need to rush into anything, considering your mortgage options and getting started on a financial plan are a good idea. As a mortgage broker, I can help you understand your options, put together your financial profile, and find the best mortgage for your situation.

Book your free consultation or call 705-315-0516 to get started today. Let’s make your fresh start a successful one.