Those going through a divorce often think about how their future will look. One big part of that picture is finding a new home if one or both spouses are moving out of the family home. Many think of moving as arduous, and therefore something they want to do once and not do again a few months or a year later. It may make sense to buy a new home and move in for these folks, but that may not be as easy as it sounds, even if the spouse finds one they want in their price range.
Marital property rule could apply
Couples who plan to buy property while getting divorced quickly realize that the new home qualifies as marital property, which means it is subject to the same division as other marital assets. It should also be noted that the court does not like spouses to spend unexpected or unusual amounts of money when litigating a divorce – those who plan to do so should first discuss this matter with their attorney and the judge. They can authorize that the new home’s title has only one spouse listed.
While loan rates are at historic lows, getting the large loan associated with a mortgage can get tricky because the spouse’s finances are tied up in the divorce and subsequent settlement. One can assume that the judge will divide assets in a specific way, but that may not happen. It can leave the mortgage company skittish about giving a good rate or the new owner owning the home with less money in the bank than they thought. It may even get problematic if the soon-to-be-ex needs to co-sign the loan – in this case, get a quitclaim deed that basically disavows or transfers any acquired interest they have in the new home. A note of caution: Those who co-sign need to be aware that they are responsible if an ex-spouse defaults on their mortgage even when there is a quitclaim deed.
Attorneys can help with this complicated issue
It may be best to put stuff in storage and rent an apartment until finalizing the divorce. But parents often want to create a stable new home environment for the children to ease their transition. Family law attorneys can negotiate a spouse’s homeownership as part of the mediation or litigation process. Whatever the issues specific to a client’s divorce, an attorney can help make this transition smooth, minimizing legal issues and financial exposure.