26 Jul Can I start buying a house before my divorce is final?

Q. Can I start buying a house before my divorce is final as long as I close after the divorce is final?
— Planning ahead

A. The short answer is yes – if it is agreed upon by both parties and your lender has approved you for a new mortgage considering your new financial situation.

But of course there’s a longer answer.

You should most probably not purchase a new home until the marital settlement agreement has been signed, just in case the agreement changes, said Jody D’Agostini, a certified financial planner with AXA Advisors/The Falcon Financial Group in Morristown.

She said before you enter into a new financial obligation, you need to make sure that this is affordable with your new financial situation. If the divorce agreement changes, the new home may or may not be affordable, she said.

“You would want to be certain that you have done the financial planning showing your new circumstances and be sure that this new home still fits into your budget and does not derail your long-term goals,” D’Agostini said. “I generally suggest that you purchase a home that is not more than 28 percent of your gross income.”

That includes your mortgage, taxes and homeowner’s insurance, she said.

If your future obligations are not settled, then you may want to hold off until they are.

She said if you’re still on an existing mortgage on a marital property, you may not be able to qualify for the new mortgage based on your debt-to-income ratio.

“The lender will most likely need to see your new income, inclusive of your salary, plus or minus any alimony or child support that was awarded,” she said. “This will change your financial statement for your mortgage application and may change your qualification.”

And generally, she said, the lender will want to see your signed marital settlement agreement.

Good luck!

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This story was originally published July 26, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.