Many of us don’t have the option of buying a home during the process of divorce due to financial constraints. Even if you have the resources to afford the down payment, mortgage payments, property taxes, and upkeep, careful thought should still be given to this idea.
Going through a divorce is highly stressful. You likely will experience a wide variety of emotions, including the fear that you won’t have anywhere to live. At the beginning of a divorce, many questions remain unanswered about you and your spouse’s financial future. You can count on one thing: many changes are coming. Most legal, financial, and psychological experts advise that couples who are going through divorce not charge forward with major financial decisions. It just doesn’t make sense.
If you buy a home during the divorce process, you conceivably would be purchasing a house with funds that belong partially to your soon-to-be ex-spouse. If you intend on buying the house in your name alone, title and escrow companies still will require your spouse to attend the closing, sign the documents, and basically give permission for the home to be purchased in your sole name. In fact, many attorneys require the non-purchasing spouse to sign a special agreement to permit the purchase of a home by the purchasing spouse during divorce proceedings.
Granted, during the divorce process, your spouse and you could buy a house and place both the title and/or mortgage in both of your names. This generally is not a good idea for a host of reasons. You first should discuss this with your attorney if your spouse and you are considering doing this.
During the divorce process, “temporary orders” or “temporary restraining orders” (also known as “temporary injunctions”) often are put into place to prevent spouses from spending down assets or incurring new debt. Typically, a temporary order specifically forbids both spouses from using community funds for major purchases without first obtaining the consent of the other spouse (and possibly the involvement of the attorneys). Further, a temporary order typically instructs both spouses not only to spend only what is absolutely necessary to sustain their individual households, but also to notify the other about any expenses that are out of the ordinary, even if “separate funds,” i.e., non-community funds, are used for that expense.
It is also possible that purchasing a home during divorce could ultimately result in financial difficulties for one or both spouses. One spouse might be approved for a loan on a new home based on his or her current income and expenses. However, this doesn’t take into account future debts–the amount of which might be unknown at the time of purchase–such as debts pursuant to final divorce documents, e.g., child support, alimony (referred to as “spousal maintenance” in Washington), a “lump sum” pay-out to the other spouse, etc.
It may make more sense to rent a home temporarily instead of buying one during divorce. While it may be possible to purchase a home while going through the divorce process, it generally is ill-advised and can be problematic–especially buying a home where both spouses are on title and mortgage.
The Levey Law Group recommends that you consult with your attorney and financial advisor to thoroughly address the following: 1) the long-term effects of financial decisions such as home purchases; 2) the tax implications; 3) future projected financial responsibilities; and 4) other factors.
If you have any questions regarding this topic or any other topic related to divorce, please call our office at 253-272-9459 to schedule a consultation.
