When you’re ready to make a fresh start and move forward with your life, putting the past behind you is essential for moving forward. You don’t want to let the past impact your ability to get on with your life. And if buying a home is part of your plan, you need to prepare early.
Know the score
If you’ve never owned property before your marriage, have never had a credit card in your name…in other words, you lack credit, you will need to establish some. You need a credit score to get a mortgage. Apply for a credit card or even your own mobile phone account. Don’t apply for too many things at once as that could negatively affect your credit score since it might be a sign you are taking on too much debt. Start slow.
If you’re going from two incomes to one, you need to have a good handle on what you can afford. Work the numbers by looking at your income sources. Consider all your current and anticipated expenses – especially when it comes to a home. Remember, you will now have to cover all utilities, taxes, maintenance and repairs, along with food, clothing and other essentials. Be realistic and don’t stretch yourself too thin.
Know your obligations
I often talk about the importance of having a Separation Agreement in place before you sell your marital home. It is a legal document that outlines the rights and responsibilities of each party regarding the division of assets, financial support, childcare, and anything else that is affected by the separation. You can’t get a new mortgage without one.
It’s just business
Finally, I know how hard it is to let go of your family home, especially when there are children involved. Let go of the guilt and treat the sale like a business transaction. It’s just bricks and mortar. If you let your guilt take over, you risk compromising the sale and getting less than you deserve.
By treating it like a business transaction, you are automatically focused on maximizing your return – enabling you to move forward on the best financial footing possible.