Buying a house before a divorce (amicable) (rates, account, income)
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Let's say you and your spouse are talking about getting a divorce. It's amicable and finances are not an issue (he/she makes quite a bit of money than you do they have no interest in making it a contested divorce). You have agreed upon a certain amount of $ that you will keep.
You want to take advantage of the low interest rates and the good timing in your career to buy a house and use the $ that your spouse leaves you as a down payment.
You would take out a mortgage in your name and the property will be in your name only.
Your spouse is on board with the plan and has no intentions of claiming the property during the divorce
Would you still wait or would you go ahead and buy it before starting the divorce proceedings?
I'd check out the state laws regarding this, because in most places any assets bought before a final divorce decree are considered joint assets. Even though you say its amicable divorce can make even nice people mean. JMO
Wouln't the spouse who makes more money than you be interested in keeping it amicable though instead of making it contested and potentially losing more?
The money is in the joint bank account for as much as it's worth.
I live in a community prop state so even a loan in one name would be deeded to both parties. Why not accelerate the divorce if that's where it's going?
Let's say you and your spouse are talking about getting a divorce. It's amicable and finances are not an issue (he/she makes quite a bit of money than you do they have no interest in making it a contested divorce). You have agreed upon a certain amount of $ that you will keep.
You want to take advantage of the low interest rates and the good timing in your career to buy a house and use the $ that your spouse leaves you as a down payment.
You would take out a mortgage in your name and the property will be in your name only.
Your spouse is on board with the plan and has no intentions of claiming the property during the divorce
Would you still wait or would you go ahead and buy it before starting the divorce proceedings?
Are there any kids in the picture?
At any rate, I would take the question to an attorney first just to be sure. Sometimes the legal truth may surprise you. For example, because "home equity" is a privileged asset class for many things, it may look like you are suspiciously trying to "shield" assets. While it may not be true, this type of legal assessment is just not something I'd feel really comfortable doing on my own. It's too big a decision to risk it, IMO.
My parents did that... but that was oh... 20 years ago at least.
They used the same lawyer, filled out all the paper work with what each was getting, signed it and went to the court date. No one really looked into anything because no one fought about anything.
My mother had her house purchased with money from the marriage before the divorce occurred.
I can't imagine the potential rise in interest rates between now and the time the divorce happens being worth the additional cost in lawyers it would take to ensure this went smoothly.
To me, it just doesn't seem worth it. Wait until your final unless you still think there's a chance of this divorce not happening. People were claiming interest rates were going to suddenly spike 5 years ago... we're barely above the rates at that time.
It's just not worth the complications in my opinion.
I believe it is possible to enter into a legal separation, in which he settlement terms can be mutually agreed upon prior to the actual divorce, and would then be judicially enforceable. The divorce court judge could overturn it, but it would b e extremely rare for him to do so unless there was some kind of outrageous victimization apparent. Your state may vary.
If you're getting a divorce anyway, have your divorce attorneys advise you on this.
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