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Should I buy a house during my divorce?

On Behalf of | Dec 4, 2020 | Divorce |

It is understood that you or both of you are moving out of the family home. Maybe this was by choice, or perhaps by necessity. This prompts the question: Where do I live? The inclination may be to find something and buy it so you can move from the marital home to the new one. However, this might not be a good idea. Texas is a community property state without legal separation – this means that any assets acquired before the divorce is final could become community property. The spouse could claim any new home purchased even if you paid for it without their help or knowledge.

No significant purchases during the process

The courts do not want a spouse to spend unusual amounts of money during the divorce process, and an automatic court order goes into place prohibiting unusually large purchases. Spending money on a home can put you in violation of the stay.  The reason for this is that, among other things, it alters the value of the community property as it is divided. It also prevents spouses from spending money before community assets get divided. Violating this order can impact the portion of the community property split, but a spouse can seek the judge’s approval ahead of time.

A quitclaim deed may help

Those interested in buying a new home during a divorce in a community property state will also likely need their spouse to sign a quitclaim deed, which disavows or transferring any acquired interest they have in your new home or if they are moving out of the old one. This situation can create headaches if the split is an acrimonious one. Moreover, the quitclaim deed does not remove the borrower’s name or responsibility for the mortgage payment.

An uncertain time to buy

The circumstances of the divorce may be far from settled when buying a new home. This can lead to financial problems:

  • The actual settlement may be smaller than the expected one.
  • You may have to assume a larger than expected amount of debt.

Attorneys can help navigate this complicated issue

Living arrangements can be part of the discussion if the couple mediates their divorce. The state also allows marital partition agreements in writing that designate the new home as separate property. Whatever the potential solution, it is wise to first speak with an experienced Board-Certified family law expert attorney practicing here in Texas. They can help clients negotiate a home purchase during the mediated settlement or litigation and protect other financial considerations that will be part of the divorce.