Divorce is traumatic. It impacts your finances and your mental and physical health. A Danish study found what many who have gone through the process intuitively know to be true: that those going through divorce report poorer physical and mental health, including more symptoms of stress, anxiety, and depression, along with higher instances of hospitalization, substance use —even higher mortality risk.
When viewed from the outside, it’s easy to understand why divorce is so universally challenging. The process of divorce includes a variety of difficult events. From separation from your children and, in some instances, leaving behind your matrimonial home, divorce is emotionally stressful.
Leaving your house (either because your spouse will retain possession or sell it and split the proceeds) can leave you feeling unmoored. Oftentimes returning to the life of a renter can be uncomfortable, and won’t match the style of living you’ve become accustomed to.
As much as you might want to re-establish your sense of permanence after your separation and divorce, I don’t think it’s wise to rush to buy a home right away. Here’s why you shouldn’t buy a house right after divorce.
Your Spouse Might Get Half if You Buy Before Divorcing
First, rushing to buy property might open you up to additional legal strife. While you might be feeling the urge to re-establish yourself in a comfortable property that is all yours, I encourage you to wait until your divorce is finalized. Buying a property before your divorce is finalized could be a huge mistake.
If you buy a property before your divorce is finalized, it might end up being considered community property, and your spouse may be entitled to claim it. Property purchased after the date of separation might be included in the account of community property, although this more commonly happens with smaller assets like furniture or vehicles. But it can happen with a home too. If your new home is considered community property, you may be required to split the equity with your spouse.
If you are sure that you want to buy property before your divorce is finalized, take steps to protect youself. First, you’ll need to ensure you and your spouse have completed and signed a Separation Agreement. This legal document outlines all jointly held financial assets, and how they will be distributed.
Most lenders will require a copy of your signed Separation Agreement before you’ll qualify for a mortgage. For additional protection, you may need your spouse to sign a Quit Claim Deed. This deed is a legal document that transfers ownership of property from a previous owner to a new owner. By having your spouse sign a Quit Claim Deed to your new property, they are forgoing all interest in it.
You Need Time to Rebuild Your Finances
Whether your divorce is amicable or contentious, it’s going to be hard on your finances. While studies show that women are disproportionately financially affected by divorce, both spouses will suffer financially at first.
It’s not just about the expenses, although the legal fees related to divorce, even amicable ones, can be substantial. In addition, divorce can put you in financial limbo while the details of spousal support and child support are finalized. Before these details are set in stone in your divorce order, you should avoid taking on financial obligations.
Finally, even if you have the financial ability to purchase a home, you may not be able to until after your divorce is finalized. If your name is still on the title and mortgage of your matrimonial home, this could present a problem. Prospective lenders may be unwilling to approve a new mortgage if you still have a matrimonial home.
This reluctance stems from mortgage qualification guidelines set out by the Canada Mortgage and Housing Corporation. Lenders use two essential ratios to determine whether you qualify for a mortgage: your total debt service ratio and your gross debt service ratio.
These ratios consider your housing costs and current debt obligations as a percentage of your gross income to determine your overall mortgage affordability. Carrying a mortgage may be enough to prevent you from qualifying for a mortgage on a new property.
To purchase a home of your own, remove your name from the mortgage and title of your existing property.
You Need Time to Recover Both Mentally and Physically
Finally, you need time to recover after your divorce. Even if it’s amicable, divorce is a traumatic experience that takes an emotional toll, and the effect on your mental health can be significant. You can prioritize your mental health by engaging the services of a professional therapist. You can also spend time rebuilding or strengthening your social bond with friends or family.
Divorce can have physical effects, too. Individuals going through divorce contend with the physical effects of stress, including weakened immune systems and extreme weight fluctuations. These physical changes can have a lasting impact on your health. Divorced men, in particular, experience a 250% increased mortality rate after divorce. However, you can offset the physical impacts of divorce by joining a gym, focusing on a healthy diet and rediscovering old hobbies.
Consider Waiting 12 Months Before Major Life Changes
While you might feel pressured by the current real estate market to dive into homeownership right after your divorce is finalized, we recommend waiting at least 12 months before buying property. Waiting this long to make significant life changes after a traumatic event is wise because it prevents you from making rash decisions that may be irreversible. Just as we wouldn’t advise moving to a different province after a death in the family, take your time before purchasing a property.
Instead, focus on your mental, physical, and financial health in the first 12 months following your divorce and separation. Take advantage of the reduced responsibility of renting for a year and focus on other aspects of your life. Enroll in therapy, join a gym, and funnel your extra income towards rebuilding depleted savings.
You don’t need to be fully recovered before buying a home. Healing from divorce is a process of grieving. Fully healing can take years, and that is too long to put your life on hold. That said, by waiting a year, you’ll have a clearer picture of the new trajectory of your life. This clarity will help you buy a property that suits your needs in the long run.
