Divorce, Credit, and Homeownership: How to Prepare for Your Next Mortgage

A marital breakdown can change everything — including your financial roadmap. But with the right preparation, you can absolutely own a home again. Here’s what to consider to rebuild and position yourself for future mortgage approval.

1. Clarify Your New Financial Picture

Start by documenting:

• Your new income sources (employment, support, etc.)

• Your monthly obligations

• Which debts are in your name vs. joint

A clear budget helps you understand what you can afford and what needs adjustment.

2. Get Your Credit Cleaned Up

If joint debts were missed or maxed out during separation, make a plan to repair your credit.

• Pay down revolving debts below 50% of the limit

• Set up automatic payments

• Dispute any errors on your credit report

Good credit is your ticket back to homeownership.

3. Save for a Down Payment & Closing Costs

Aim to have:

• 5% minimum down payment for a purchase under $500,000

• 1.5% extra for closing costs (legal, land transfer, appraisal)If your separation agreement includes equity or support payments, those funds can often be used toward your purchase.

4. Keep Documentation Organized

Lenders will ask for:

• Your separation agreement

• Proof of support payments (if applicable)

• Notice of Assessment and income documents

Having everything ready speeds up your approval process.

5. Work With a Broker Early

A mortgage broker can help you:

• Estimate your new buying power

• Recommend timing (when to apply)

• Help improve your credit and save efficiently

Bottom Line:Your separation doesn’t define your financial future. With a clear plan and the right advice, you can absolutely rebuild — and get back into homeownership with confidence.