If you find yourself dealing with the post-divorce home buying process on your own, rest assured that you can do it. When the dust settles, consider chatting with a financial advisor and mortgage loan advisor to help you create a new financial roadmap for years to come, including saving for a down payment and creating a budget that will accommodate a monthly mortgage payment . Here’s how.
Schedule an honest review of your finances
The divorce process means assets and expenses are divided, which can leave your financial picture (and credit score) very different than when you were married. While you’re recovering from this life change, it’s wise to take an impartial professional look at your entire financial portfolio so they can give you sound advice on how to move forward. A wealth management advisor from CUSO Financial Services, LP («CFS*») at Elevations Credit Union may work with you.
During the initial meetings, you may share bank statements, investments, income, spousal/child support (to be paid or received), and any joint financial arrangements listed in your divorce decree, such as: B. Funds used for monthly child care/school tuition, future college expenses or your children’s weddings.
They can also check your credit score and, if needed, chat about ways to improve it. This review may include creating a debt repayment or consolidation plan.
This comprehensive review gives your financial advisor a snapshot of your incoming and outgoing money over the next few years as you prepare to buy a home.
Start a new savings plan with a focus on home ownership
Once you know where your finances sit, it’s time to focus on buying that new home. Your advisor can help you invest proceeds from the sale of a property together or split investments into a new short-term, interest-bearing savings plan.
- This account can grow into funds to cover:
- A deposit on your future home
- Home Inspection Fees
- closing costs
- Real Estate Agent Fees
- moving expenses
- A nest egg for first home repairs or conversions
They will work together to determine how much you need to put aside each month and how long you need to be ready to own your home. Having that pile of money ready when it comes time to make an offer on a home is both empowering and smart!
Prepare for the mortgage application
Once you have a homeownership plan in place and your divorce is finalized, you will need to apply for a mortgage and obtain a letter of pre-approval to show your real estate agent when writing a home listing. You will be asked to provide evidence of your income and expenses for the past few years. If you’re a self-employed small business owner, plan on showing even more records.
After a divorce, some problems can arise. If your last name changed during the divorce process, be prepared to submit a copy of your divorce decree with your old name and your new name. This additional documentation will help those reviewing your records to know that the different names are in fact the same person. You may also be required to provide financial institutions with your divorce decree and an updated photo ID (such as a driver’s license, ID card, or passport) when requesting records from previously joint accounts with your ex-spouse.
At Elevations we have a fantastic mortgage team who can help you with application and loan selection to ensure you make the best choice for your current life plan – whether it is a starter home or your permanent residence.
Take these very first steps
Now that you have an overview of what to do, let’s move on. Divorce is an emotionally and financially draining linchpin in life, but it’s entirely possible to deal with it — and find a new way.
We recognize that every situation is unique, but we’re ready to help when you’re ready to move forward and buy a home. Contact Elevations Credit Union’s CFS* wealth management advisors or a member of our mortgage team. They will be happy to answer your first questions and arrange a personal or virtual visit.
In the meantime, learn more here:
NMLS no. 717246
*Non-deposit investment products and services are offered through CUSO Financial Services, LP («CFS»), a registered broker-dealer (member FINRA/SIPC) and an SEC-registered investment adviser. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk, including potential loss of capital. Investment Representatives are registered through CFS. Elevations Credit Union has entered into an agreement with CFS to provide deposit-free investment products and services to members of the credit union.
Financial advisers are registered to conduct securities business and licensed to conduct insurance business in limited states. Response or contact with residents of other states will be made only after compliance with applicable licensing and registration requirements. The information on this website is intended for US residents only and does not constitute an offer to sell or the solicitation of an offer to buy brokerage services to persons outside the United States.