Going through a divorce is complicated by anyone’s standards. Even if you are going through a relatively “easy” divorce by most accounts, both you and your soon-to-be-ex-spouse will be forced to examine every aspect of your social and financial lives as you go through the process.
In the case of almost any divorce, the most challenging factor that the couple has to work through is that of deciding “who gets what” when it comes to their shared financial assets. And, for situations whereby the couple just cannot seem to see eye-to-eye on anything, the financial piece of the divorce puzzle can be the hardest to solve.
If you are considering buying a new home during divorce or separation, you are right to question whether this is the best time to make such a purchase. Here are points to consider.
Buy a New Home During Divorce or Separation?
The most critical thing to remember when considering whether to buy a home during a divorce or separation is that – if you do not handle things properly – you could end up making a huge mistake. You could be required to sell your newly-purchased home at the end of the divorce process in order to recoup some of the money in order to pay your spouse. Of course, this would be a very costly situation, since you would almost certainly lose money in the process.
The Risk Factors in Buying a New Home
The risks you face in buying a new home during divorce come into play in the following situations:
1. You buy the home before you are legally separated or divorced: If you start the purchase of a new home before official separation or divorce proceedings have gotten underway, you complicate the situation significantly and it could backfire on you.
2. You purchase the new residence with money that belongs partly to your spouse: Make sure to buy the home with money that is very clearly only yours (but that in no way belongs to your spouse). Otherwise, you could end up having to pay back your spouse down the road – selling the new house just to get the cash.
3. Other assets have been heavily in contention: If your divorce is of the very contentious kind with lots of back and forth and fighting between your attorneys or each other, it is likely that the purchase of a home right now is not a wise move as it is likely to get embroiled in the mess.
4. You end up staying together: In the event that you were to later decide to call off the divorce or end your separation, the new house (whose title would be only your name) would be a constant reminder of your divorce attempt. Better to start fresh with a new home that you buy together (or to stay in your current home for now).
What to Do
The best thing to do in this situation is to hold off on any home purchases until your divorce is totally finalized, your separation advances into full-fledged divorce, or you decide not to get divorced but remain together. If you feel very strongly that you want to buy a home now, consult your attorney first to make sure you are going about it properly.
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