Going through a divorce is not easy, no matter what the circumstances. You have so much on your plate, not the least of which is buying a house during a divorce. It may feel overwhelming now, but a new home will help you move into the next chapter of your life. In Virginia, you must separate for 6 or 12 months, depending on your circumstances, so one of you has to move out (unless you establish an in-house separation arrangement). Make it less stressful by working with an experienced agent and keeping a few things in mind as you search. (The information in this article is based on Virginia state law but should expressly not be construed as legal advice. You should be sure to consult with an attorney for help with your specific situation).
Avoid Using Marital Money
Until your divorce is final, you want to be sure your new home will be considered your separate property. Any money you use when buying a house during a divorce, including the down payment, must be financed with your own money. That means you cannot use “marital property” to finance or pay for expense associated with the purchase.
Marital property is property that was acquired or earned during the marriage or used for the benefit of the marriage or shared with the spouse. Separate property is property which belongs only to one of the two spouses. Generally, separate property is property that belonged only to one spouse before marriage. It could also include some property given only to one spouse during the marriage, like an inheritance from a relative.
During a divorce, the most common types of marital property that will be divided are real property such as the family home, second homes, and personal property such as cars, jewelry, and household items. Other property that will be divided is intangible property such as income, dividends, benefits, and debts. Any property that is separate property remains in the hands of the spouse who owned it before or during the marriage.
Mixing marital funds with separate funds is referred to as “commingling” and commingling funds can endanger the status of your separate property. It also means that you need to refrain from using marital funds to pay for any costs of maintenance and upkeep of the home.
Obtain a Legal Separation
In some cases, getting a legal separation before proceeding with a divorce makes sense. If you practicable in your case, having a legal separation along with a property settlement agreement signed by your spouse will protect your new house from being considered marital property. Your property settlement agreement should specifically address newly acquired property and separate assets. Notwithstanding the settlement agreement, you still need to avoid using marital money to pay for any aspect of your new home.
Consider Potential Support Payments
Before you start your search for a new home, give careful consideration to your financial situation. A divorce can be a financial drain, even if the divorce is amicable. You may not be able to maintain the same lifestyle solely on your own income that you enjoyed as a married person. You may have to compromise in several areas that you are not now able to fully appreciate. Additionally, you might be ordered to pay child or spousal support in amounts you cannot afford along with a new mortgage payment. On the other hand, if you are counting on a specific amount of support payments after the divorce, consider whether you can afford the mortgage if your former spouse defaults on any payments. Also, think about how you will handle the mortgage when the support payments end.
Another important consideration is how taking ownership of a significant asset such as a new home will affect your financial picture in court. If you take title to a new house before the divorce is final, you will have to include it as part of your total assets when dividing marital property. By owning a significant separate asset, the court might be inclined to decrease your share of the marital property and award your spouse a larger percentage of the joint assets.
Evaluate Any Special Circumstances
As alluded to earlier, your own unique circumstances could affect your post-divorce financial picture. For example, if you are at fault in ending the marriage, the court may order you to pay more support, or have your support reduced. Even though spousal support is a payment from one spouse to the other to help the recipient spouse maintain a lifestyle as close as possible to the one they had during marriage, the court will factor in to the final order any bad behavior that led to the divorce.
Work with an Experienced Virginia Real Estate Agent
Avoid mistakes in buying a house during a divorce or divorce settlement. Consult with a licensed Virginia real estate agent at the Katie Zarpas Group if you are looking for a new home before your divorce is final. Their experienced agents can guide you through the process and help make sure your transition into a new home as smooth as possible.