Can I buy a home in Colorado Springs before my divorce is final?

It's possible, but talk with your divorce attorney before you go under contract. In Colorado, property either spouse acquires during the marriage is generally marital property, so a home you buy now could become part of what's divided. Using shared money for the down payment can also run into Colorado's automatic court order on marital property. And lenders usually need a signed separation agreement or decree to sort out your income, debts, and the existing mortgage. With the right protections in place, it can work; without them, it can be an expensive mistake.

Why buying before the decree is risky

• The new home may be marital property. Colorado law generally treats property either spouse acquires during the marriage as marital, no matter whose name is on the title, unless an exception applies, such as a gift, an inheritance, or a valid agreement between the spouses. That means your soon-to-be ex-spouse could have a claim to the home you buy, even if only your name is on it.
• The down payment may be marital money. Once a divorce is filed and served, Colorado's automatic temporary injunction bars both spouses from transferring or disposing of marital property without the other's consent or a court order, apart from the usual course of business and the necessities of life. Pulling savings out for a down payment can fall within that.
• Your finances aren't settled yet. Until there's an agreement, you may not know how much you'll walk away with, what support you'll pay or receive, or who's responsible for the existing mortgage.

Your attorney may be able to protect the purchase, for example through a written agreement with your spouse or a court order, but that's a legal question, not a real estate one.

A real situation I've seen

I had a client who wanted to buy before the divorce was final. I told them to check with their lawyer first, to make sure that if they went under contract, the new home wouldn't be considered an asset shared with their soon-to-be ex-spouse. They asked, and it helped them avoid a mistake. After everything was finalized, we helped them buy.

That's not to say you can't buy before a divorce is final. But you need the right protections in place, and as a real estate agent, I can't tell you what those are. That's your attorney's job. What I can do is make sure you ask the question before you sign a contract, not after.

What a lender will look at

Mortgage lenders underwrite your situation as it is today, so an open divorce raises questions:

• The existing mortgage. If you're still on the loan for the marital home, a lender will generally count that payment against you until a decree or agreement assigns it to your spouse, or the loan is refinanced or paid off.
• Support income. Under Fannie Mae's rules, alimony or child support you'll receive can count as income only if it's documented in a separation agreement or decree, you've received it for the most recent six months, and it's expected to continue for at least three years. Proposed or voluntary payments without an agreement can't be counted.
• Support you'll pay counts as a debt and reduces what you can borrow.
• Joint debts and credit. Shared credit cards and loans still show up on your credit report until they're separated.

Talk with a lender early, and bring your separation agreement or draft settlement. It's often easier to qualify once the decree is entered.

Other ways to bridge the gap

• Rent for now. Renting until the decree is final keeps your options open and avoids most of these issues. Whether to rent or buy in Colorado Springs walks through that decision.
• Get pre-approved and keep looking. You can talk with a lender and learn the market without signing a contract until your attorney is comfortable.
• Time the closing to the decree. If the decree is close, some buyers line up their search so the closing falls after it's entered. Ask your attorney how much flexibility there is.

What's specific to buying during a divorce in Colorado Springs

• The court. Divorces in Colorado Springs are handled by the 4th Judicial District Court for El Paso County. If you need the court's approval to use funds or buy property before the decree, your attorney would ask that court.
• Help with procedures. The Self-Help Center in the El Paso County Judicial Building has family court facilitators who can explain divorce procedures if you don't have an attorney. They can't give legal advice about a purchase.
• Military families. If you're planning to use a VA loan, your entitlement may still be tied to the marital home's VA loan. A VA-experienced lender can tell you how much entitlement you have available. What happens to the house in a Colorado Springs divorce covers the marital home itself.

How to decide

• If your decree is close, consider waiting or timing the closing to fall after it.
• If you need to buy sooner, ask your attorney what protections would keep the new home yours, and get them in writing before you go under contract.
• If you're not sure you'll qualify yet, talk with a lender with your separation agreement in hand.
• If none of that is settled, renting for now is a reasonable bridge.

What could change the answer

• How close your divorce is to a final decree.
• Whether you have a signed separation agreement, and what it says about property and support.
• Whether your attorney can put protections in place for the new purchase.
• Whether you're still on the mortgage for the marital home.
• The type of loan you'll use, especially a VA loan.

When to talk with a professional

Talk with your divorce attorney before you make an offer or move any money for a down payment. Talk with a lender early about how your current mortgage, support, and debts will be counted. Ask a CPA if the timing could affect your taxes. And work with a real estate professional who will make sure your attorney weighs in before you sign a contract.

Sources

• C.R.S. § 14-10-113 (definition and presumption of marital property): https://colorado.public.law/statutes/crs_14-10-113
• C.R.S. § 14-10-107 (automatic temporary injunction): https://colorado.public.law/statutes/crs_14-10-107
• Fannie Mae Selling Guide, B3-3.4-02, Alimony, Child Support, Equalization Payments, or Separate Maintenance: https://selling-guide.fanniemae.com/sel/b3-3.4-02/alimony-child-support-equalization-payments-or-separate-maintenance
• Colorado Judicial Branch, El Paso County Self-Help Center: https://www.coloradojudicial.gov/courts/trial-courts/el-paso-county/self-help-center