Buying a home as a single parent: What you need to consider before making the big move including school district and overall space.
Q: I got divorced in October and have an eight year old child. When my “divorce apartment” lease was up, I bought in a town about 15 to 20 minutes away, in a different school district. It was a mistake that I guess didn’t really hit me until I made it.
Very fortunately, I will still have just enough money once I sell this place to buy something in my son’s former school district, returning to where we know and feel comfortable.
But, I’m torn between buying something I can easily afford now with a full 20 percent down payment that won’t have outdoor space for my son and buying something with a smaller down payment but will have outdoor space and is in a better location.
The place I can afford will be in a condo complex off the beaten path. You’d need a car to go anywhere, and I’m thinking about stretching that budget to buy something closer to school, friends, parks, and other places he can walk to or ride his bike.
What advice can you give me? Which way should I go?
A: Let’s start with the obvious: Divorce is a life-changing experience, and everyone makes mistakes going through it. There are personal mistakes and financial mistakes, but the important thing to know is that you can at least fix the financial mistakes and put yourself and your son back on solid ground.
The single biggest mistake people make when it comes to divorce is trying to hold onto the marital house. Often, women will ask for the house because they want their children to avoid another jarring move. But, then they might take less cash or a smaller part of their ex-spouse’s 401k, which is a poorer deal over the long run.
The other mistake people make is making fast decisions that can have significant financial ramifications, such as selling property, buying a new home, buying new cars, or making other quick decisions during or in the first year after a divorce that will have a big financial impact, or unintended consequences, in addition to all of the other changes divorce can bring.
Life is full of compromises, particularly when it comes to the intersection of financial decisions and emotional issues. You have a conflict: What will be best for your child vs. what will be best for your finances. We think you should keep your options open.
It may be best for you to consider a short-term rental property. The rental property may be a lower cost alternative over the next several years until the changes in your life settle down. It’s not that we favor renting over buying for you, but we want you to keep your options open. You may not be able to afford to buy the perfect home in the perfect location for you and your child, but you may be able to afford to rent a home that suits your needs in a location that comes closer to the perfect location for your family.
When you sell your divorce apartment, you will have spent quite a bit of money moving from your old home, buying the new place, paying the costs to move into that place, maybe even putting money into decorating and improving the place. Now, you will sell that place and probably incur a sales commission of around 6 percent along with all of the costs of the sale and the new costs of a move. That’s a lot of cash. The next place has to be the right place for you for at least the next 5 to 7 years, and preferably until your child is done with high school.
What we don’t want you to do is buy another place that you can “afford” but that place is also the wrong place for you. You can’t afford to buy, move, sell, and move every couple of years. Unless you are making a considerable profit in these moves, the financial costs are probably hurting you and the stress of the moves can’t be good for you or your child.
As you balance these interests, you need to think through all of the intended and unintended consequences (financial and emotional) of this next move. We don’t know what that move should be, because we’re not there looking at properties with you. We just know that the home you find should be within your budget (even if you don’t put down 20 percent) and should be as close to meeting your family’s needs as possible.
Remember, you won’t get everything that you want, and that’s normal. No buyer ever gets everything they want. But you might get what you absolutely can’t live without.
As Ilyce writes in 100 Questions Every First-Time Home Buyer Should Ask, when you buy a home, you need to make a list of what you absolutely must have and what you absolutely have to have in the property. You look at the list, look at what you can afford to spend on the mortgage, taxes, and insurance each month, and then start looking for homes.
Usually, the perfect home is way out of the budget, and the home that gives you everything on your wish list won’t include your neighborhood of choice. But life’s a tradeoff. So it’s at that point that you prioritize the needs and wants to come up with the right home.
Good luck. Your son is lucky to have a mom so concerned with his welfare. And the good news is that even if you have to scrape by but are in a better neighborhood, it’s only until your son is through high school. At that point, you can sell your home (which will always be worth more in a better school district) and move somewhere more affordable.
mt grandaughter is a single parent of two in lake county and would like information on buying her first home with assistance.she is in lake county and wants to buy in the mt, dora area.if you could send her some information on which channel to go through i would apprrticiate it.