Buying A Home After A Divorce: Is It A Good Idea?
More than 90% of people in western cultures will marry before they turn 50 years old and, on average, roughly 40–50% of all marriages in the United States will end in a divorce, according to the American Psychological Association. With such a high rate of divorce, it’s important to keep in mind that a successful marriage is not guaranteed, and as such, getting married can be considered a risk.
Financially speaking, one of the biggest risked assets during a divorce is the family home. Many divorces result in neither party keeping the home and instead selling it to promote a quicker and easier split of marital assets. Due to the significant risks that divorce poses, combined with the high rate of divorce, many people are finding it more necessary to create prenuptial agreements shortly after the engagement.
From the attorney’s fees, to surrendered assets, to the mental toll that divorce can have on someone, and not to mention alimony and child support, divorce is expensive. With all of this, it’s easy to see how the full cost of a divorce can last for years, and even the rest of a person’s life. Some current estimates claim that the average cost of a divorce is $15,000 per individual, and that’s only counting the costs for fees and services.
The first step that someone needs to take after a divorce is to evaluate their current life—where they are and where they want to go. After splitting, some individuals decide to move to new communities or even states, while others opt to remain in the same location. As a divorcee, you no longer have to consider the needs of your partner, or where they may want to reside, but it’s important to figure out where you want to live as soon as possible. Of course, children should also be considered, as it’s better for most school-aged children to remain in their current school district until they are old enough to have real input on the decision to move.
After a divorce, and while considering whether or not you want to move, it’s likely that you might consider buying another house. The reason could simply be that being a homeowner is the lifestyle you are used to, or even that being a homeowner is the lifestyle you aspired to have. Whatever the reason may be, owning land to plant your newly single roots in could be the best thing for you. Additionally, buying a home outside of a marriage will provide you with greater protection of the home if you later decide to remarry and face the possibility of another divorce. For simplicity’s sake, the decision can focus on a few primary factors: whether or not you have kids (including their ages as well as the custody agreement), your financial situation, your professional life and where you want to go with it, and whether or not you want to get married again.
None of these determinants inherently suggests that it’s a bad idea to buy a house after divorce, since the answers are all tailored to you. One of the biggest reasons that people feel barred from buying a house after a divorce is their financial situation. There is a common misconception that in order to buy a house, you would need to have at least 20% of the cost in order to make a proper down payment, however, that’s not always the case. With loan options backed by different departments of the federal government, such as FHA loans that are backed by the Federal Housing Administration, it’s possible to secure loans with down payments near 3.5%. There are other loan programs like the one offered through the office of Veterans Affairs, and even the United States Department of Agriculture, although both of these are a bit more nuanced regarding qualifying for one.
The best way to determine whether buying a house would be a good idea for you is to consider what you want to do in the future. Buying a house won’t necessarily lock you down to that location either, since maintained houses typically appreciate in value. If you later find yourself wanting to move again, you can sell the home and use any remaining money to make the downpayment on another house. The bottom line is that buying a house after a divorce may be more feasible than you think.