Divorce is not only an emotional burden; it’s also a financial one. Most Colorado spouses are used to the luxuries of a two-income household and, most likely, good credit. While former spouses are trying to get their lives on track, they may find that most lending institutions require two incomes to get approved for a mortgage. Here are ways to get approved for a mortgage after a divorce.
If one spouse is planning on buying a new home, it’s best for the ex to refinance the shared home in his or her own name. This will potentially decrease the other spouse’s debt while increasing the possibility of being approved for a new mortgage. There are circumstances in which the ex may not be able to refinance the home on his or her own, and if that happens, spouses may want to co-own the house for a certain period of time. Spouses may also want to avoid purchasing a house at all during divorce proceedings.
It’s a risky move, and lenders are hesitant to approve those who are in the middle of divorce proceedings. Financially speaking, spouses could benefit from remaining in the home with the soon-to-be ex. This is also great for those who have children together.
Marriages are not necessarily guaranteed to last a lifetime. In spite of that, Colorado spouses do not always need to have a bitter divorce, and they can try to come to a divorce settlement agreement with a mediator. From a financial standpoint, both spouses are likely to get their fair share of assets without entering the courtroom. If there are children, both spouses are likely to have an active relationship even though their living situations have changed.
Source: U.S. News and World Report, “How to Get a Mortgage After a Divorce“, Geoff Williams, Oct. 29, 2014