Rent or buy after divorce?

The break-even

Getting into a home costs about 2 to 3 percent (closing costs); getting out costs about 6 to 7 percent (commissions, title, transfer). Call it 9 percent round trip. On a $450,000 townhome that is about $40,000. A year of rent at $2,200 is $26,400. Unless you will stay at least three years, or the market moves a lot in your favor, renting first is cheaper. It also lets you learn the new commute, the new budget and whether you like living alone in that part of town.

When buying right away is right

• The decree is entered and the joint mortgage is out of your name or assigned to your ex in writing.
• A lender has pre-approved you on your income and the support that qualifies (six months of receipts, three years to run).
• You have one emergency month in cash after the down payment and closing costs.
• You know the neighborhood because you already live near it, and you would choose it without the divorce.
• The sale of the marital home is closing, or closed, and the proceeds are yours to use.

When renting first is right

• The case is not final. Most lenders will not close a purchase during a pending divorce.
• Support is the income that qualifies you and it ends within three years.
• You are not sure which school area, which side of town, or which city.
• You want to test whether a condo or a townhome fits before committing to one.
• You are exhausted. A lease is a decision you can make tired.

Questions people ask