Buying a House after Divorce

Buying a house after divorce can be a pivotal step towards starting anew. For many individuals, purchasing a home symbolizes stability and a fresh beginning after the emotional and financial strains of divorce. It’s a decision often driven by the desire to create a secure environment, especially for children who may be affected by the divorce. 

How you move on with your life after divorce is completely up to you. With that said, the circumstances of your case and how successful you were in achieving your main goals and objectives will largely determine how you can lead a successful life after your divorce comes to an end. Although it may not feel like it at times, if you are currently going through a divorce, I can confidently tell you that your case will come to an end. The results of your case may not be exactly what you want them to be, but your case will end. The end may not get there fast enough for you, but it will arrive at a certain point.

Understanding the divorce timeline and post-divorce living

A typical divorce lasts about four to six months, including a mandatory 60-day waiting period from the filing of the divorce petition. Complex cases involving disputes over conservatorships or settlement negotiations may extend this timeframe. However, most divorces conclude within this period.

Especially if you have children, one of the main issues people encounter once their divorce begins is that their living situation may be quite different from what happened previously. If you are a father reading this blog post, then you may have moved out of the family home to relieve tension with your spouse. While you might believe this to have been the right decision for your family, it could not have been an easy one. Losing the ability to spend time with your children consistently is difficult, and you will probably never fully get used to not being able to see your kids whenever you would like.

As human beings, we have an impulse to stabilize our home environment whenever we feel off-kilter or out of sync in that regard. Having uncertainty about where you are living is never easy. That unease in this regard is highlighted especially when you consider that you will want your children to come to see and stay with you as soon as possible after leaving the family home. So finding a place to live that suits you and your children is significant to most mothers and fathers after a divorce.

Deciding what to do with the family home in your divorce

Before buying a new home after divorce, it’s crucial to decide on the fate of your marital home during the divorce proceedings. The family home holds emotional significance and is a substantial asset, much like sentimental attachments to vehicles. Discussing the future of the house early and openly with your spouse is essential.

Since the home is so physically and financially large in your community, what you decide to do at home will impact how your case proceeds, at least from a financial standpoint. There are also child custody and conservatorships issues tied to the family home, but we can discuss that in a different blog. I will say that the spouse who remains in the family home during the divorce tends to have a leg up over the other parent when it comes to staying on as the primary conservator of children. This is not always true, but from my experience, it is true more often than not.

There are a few options for you to consider regarding the family house in your divorce. The first option most widely utilized would be to sell the home and divide any equity in the home between yourself and your spouse. This is the most widely used option because many families cannot afford to pay the mortgage on a home with only one income after a divorce. As a result, splitting up the equity after a home sale tends to be the most simple from a logistical and financial perspective. You will need to work with your attorney, your spouse, and their attorney to finalize your agreement as to who to list the house with, what price the house should be listed at, and any other details associated with the sale of the home.

Considerations when selling a home after divorce

Parties in divorce cases often reach agreements on selling a home, only to see those agreements unravel due to overlooked details in the final divorce decree. It’s crucial for you and your attorney to review the home sale process before attending mediation. This preparation helps anticipate and address potential issues that may arise during listing, showings, or closing. Don’t hesitate to ask questions and ensure all concerns are clarified by your attorney before finalizing any mediated settlement or divorce decree.

Selling your home after divorce can inject much-needed cash into your finances during a time when your budget may be stretched thin. Divorce often halves your income or more, making it challenging to sustain living in a home you may not afford. While staying for the sake of children or sentiment may appeal, many face financial strain post-divorce by overextending on housing costs.

On your own time, you should begin to map out of perspective budget for yourself after the divorce comes to an end. Realistically what are you able to take on as far as a house payment? What is your income looking like as far as the trajectory over the next three to five years? He’s staying in a house like the one he lived in with their spouse really in your best interest? Consider these questions independent of what you think your kids would want. Deciding to do things for the benefit of your children primarily can lead to heartache both for you and your children, ironically.

Options for handling home equity in divorce

Next, you could choose to remain in the house and essentially buy out your spouse of their share in the equity to the home. This is, of course, assuming that there is any equity in the house. Given the state of the housing market currently, I would tend to believe that there is equity in the home in that you will not be in a position where you will be selling the house at a loss. As such, you should speak to your attorney about your options as far as paying your spouse their share of the equity.

For example, if their share in the equity is $50,000, you may have trouble finding this money. As I mentioned a moment ago, most people are not at their best financially in the period immediately preceding the end of their divorce. If you do not have $50,000 of cash on hand that you may consider your options as far as refinancing your home mortgage into your name and taking out $50,000 of cash to pay your spouse, agreeing to an installment program where you pay your spouse the $50,000 over a certain period or even taking out a loan and choosing to repay the lender rather than your spouse.

Whether it is you or your spouse who moves out of the house, each party has to be familiar with liability on that home in the event of a foreclosure. Texas family law attorneys frequently draft documents such as deeds of trust to secure assumption and special warranty deeds to protect parties in divorce, regardless of their situation. It would help if you never walked out of a divorce without having considered the importance of these two documents.

Protecting your interests when selling your home during divorce

Even if your spouse fully pays you for your equity share during the home sale, as the spouse being bought out, you still wouldn’t want to risk future liability in case of missed mortgage payments or foreclosure on the house. The other thing to keep in mind is that you cannot guarantee that your spouse will even refinance the mortgage loan into their name only. In that case, would you be stuck with no options?

The answer to that question is no. You would be able to draft in sign a document known as a deed of trust to secure an assumption that would theoretically protect you in such an instance. The deed of trust is too secure assumption would allow you to foreclose upon the house before a lender can and take over ownership of the note and home if your spouse defaults on loan. I realize this still may not sound like the greatest arrangement in the world, but it is a much better prospect than doing nothing at all.

The other side of the coin on this topic would be drafting and signing a special warranty deed wherein you did your Community property share of the home to your spouse. This prevents you from being able to waltz into the house in the future and claim ownership. As you can see, the deed of trust is a secure assumption that protects you and your interests as the spouse who will be leaving home, and the special warranty deed protects the interests of your spouse who will be staying in the home after your divorce.

What do you need to know about buying a house after your divorce?

Everybody wants to live their financial life going faster than they ought to. I know I do. When my wife and I have a savings goal or other financial goal, we want to reach that goal as quickly as possible. In doing so, you can risk putting yourself in a precarious spot financially during a time when you are most vulnerable financially and emotionally after a divorce.

There is no harm or shame in renting for some time after your divorce. This is especially true if you have moved to a new part of town or even changed jobs in cities. With the hopeful ending of the pandemic, you may find that your need to live in a Metropolitan area shrinks over time or even goes away completely. In that case, you should cool your heels and think long and hard about whether or not you need to immediately by home.

Considerations for buying a home after divorce

The decision to buy a home should be a blessing and not a curse. Given what can go wrong when it comes to purchasing a home, I want to make sure that you have no debt, have an emergency fund saved the trip for yourself, and hefty down payment. If you can look at your life after the divorce in realizing you have all these pieces in place and are in a position to do so from an employment standpoint, I don’t see anything wrong with buying a house. However, working with the families that I have been fortunate enough to work with at our law practice, I can tell you that most people are not in this position after a divorce.

However, this is just my advice when it comes to purchasing a home. You can choose to ignore this piece of advice or any other that I give out on this blog. However, I do think that after having worked with many people in divorce cases and having seen people suffer the consequences of bad financial decisions that this is a basic piece of advice that you and your family could utilize. Having a manageable mortgage payment, easy drive to and from your ex-spouse home to pick up and drop off kids near your support system are all advantages for you to look for as well.

Homeownership after divorce: emotional and financial considerations

The other thing to ask yourself is if buying a house is the right decision for you and your family or is simply an emotional outlet for you to avoid confronting issues that you have regarding your divorce. You don’t need a therapist or me to tell you that we can all act in ways that are out of character to avoid dealing with emotional difficulties or trauma. I’m willing to bet that many of us purchased an item or two on Amazon this past year out of concern or stress related to the pandemic. I can tell you that purchasing a house out of stress or fear of your post of worse life is more significant than buying a couple of shirts or a new pair of shoes from Amazon.

In conclusion, buying a house after divorce represents more than just a financial transaction—it’s a symbolic step towards rebuilding one’s life and establishing stability. While the emotional aftermath of divorce can be challenging, many individuals see homeownership as a positive stride towards a new chapter. It’s crucial to approach this decision with careful planning and consideration of financial implications, given the changes in income and asset distribution that often accompany divorce. Seeking guidance from professionals can provide valuable insights into navigating the complexities of post-divorce financial management and homeownership, ensuring a solid foundation for the future.

Questions about the material presented in today’s blog post? Contact the Law Office of Bryan Fagan

If you have any questions about the material presented in today’s blogpost, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys offer free of charge consultation six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of Texas family law and how your family circumstances may be impacted by the filing of a divorce or child custody case.

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