The answer to that question is a definite "Maybe" because there are so many "What If and Yes Buts" that can be a part of that answer....divorcing transactions have a few more of these kinds of conditions than other home buying transactions. The first logical question to ask is "where are you in the divorce process ?"
What we mean by that is have you agreed ....legally on the division of assets...your present home ...is it sold ? Do you know the amount of support or maintenance you will pay or receive ? Do you know for how long ? (i.e. is this a temporary order or a permanent one ?) How old are your children in how many years will what portion of the debt be reduced ?
You need to look at BOTH sides of the ledger...if you have determined (legally not just by mutual agreement) the division of assets....what about the distribution of debt ? Do you have credit card, medical, education or other debt and who is responsible for how much and for how long ?
Is one spouse required to insure the other and dependents? Lots of expenses can come into play that have timelines that likely don't mean a "forever" situation. Few things in life are "forever" and when a marriage is not one of them...the aforementioned are among those considerations.
Where will the down payment come from ? Wisconsin is a community property state and unless there is money that could have come from an inheritance for example...and the money has NOT been CO-MINGLED.....the down payment may well be hard to find. If Paul's Mother passes away and leaves her estate to Paul with no mention of his wife Betty, and Paul puts the money into an account only in his name...Poof...Paul has a down payment for his new home. IF on the other hand, Paul uses parts of the money to make improvements or repairs on Betty and Paul's current home, the money has been co-mingled with community property and it may well be up to the court to decide if the remainder of the funds left could be Paul's only to use as he saw fit.
For the sake of answering this FAQ .....let's "assume" (yicks) that there are funds for a down payment OR that Betty or Paul is able to qualify ON THEIR OWN for a no money down mortgage prior to the divorce being final. That is indeed possible....many markets offer such a product and given that debt to income can be calculated and credit scores are in line....there could be a home purchase in the near future but FIRST.....in some states and some legal opinions would say that first, there has to be an agreement for one spouse to "quit claim" the house to the other. (This is a whole separate post but basically means while it does not take a spouse OFF the mortgage...it gives ONE spouse management and control of the property as agreed to by both spouses.)
The second very legal document that is required which may go by different names in different locations is called a "Sole and Separate" agreement. This is required to be signed by both spouses. It means that....the money used for the purchase, mortgage payments, insurance, maintenance etc. of the property being purchased by the "about to be single" spouse is solely and separately Hers or His and the other has no legal right to the equity or ownership of it. It may be, if mutually and legally agreed for example be funded by a down payment from a retirement fund awarded to one spouse or the aforementioned inheritance. BOTH spouses need to be in agreement....OR the "new house" could well become marital property and AGAIN subject to division in the not yet final divorce. (BIG yicks !)
Thank you Anna Banana Kruchten, CRS for making us dig into our resource bank and provide readers with another answer to a FAQ !
If you or anyone you know ...and you DO or WILL know someone who is dvorcing in southeastern Wisconsin....tell them to call the Hansons for all things real estate ...we are honored to be of service and the only certified divorce real estate agents in Wisconsin.