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Bankrate.com

Buying the ex's share of the house

Dear Dr. Don,
I am going for a divorce, and would like to buy out my husband from the house. I wondered what kind of loan I would need to take. I would need at least $90,000. Could you advise me?
Marie Mortgage

Dear Marie,
The financial gyrations that take place in a divorce can be as complex as the emotions that lead you to seek divorce. However hard it may be, it's important to work together to keep both your credit histories clean so you can move on and build new lives. That means no late payments and no missed payments on the bills.

Close your joint accounts to new charges and apply for credit individually. (This is a more complex issue in community property states.) The Federal Trade Commission has a guide on credit & divorce that is required reading for any couple contemplating divorce.

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You want to keep your credit history as clean as possible if you're applying for a $90,000 mortgage in your own name. Get a copy of your credit report and credit score to see how you stand. I like the Score Power™ report because it gives you a FICO credit score and an Equifax credit report for $12.95. Correct any errors in the report.

You'll also need to have the income available to qualify for this size mortgage. Bankrate's "How much house can you afford?" calculator will help you lay out your financial situation to see if you can qualify for this size mortgage.

If you concentrate your mortgage shopping in a three- to four-week period, multiple loan applications won't hurt your credit score. That's because it's apparent that you're comparison shopping for a loan and not buying multiple homes. Speaking of comparison shopping for loans, the best place to shop rates in your market is on Bankrate.

-- Posted: Aug. 1, 2002

Read more Dr. Don columns
See Also
Financial survival guide for divorce
Saving your credit during a divorce
Refinancing after a divorce
Financial advice glossary
More Dr. Don stories

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