Everyone knows that getting a mortgage in the current economic climate can be like pulling teeth. Banks have tightened credit requirements and now demand proof verifying all aspects of your financial life. It’s understandable then why people would think that a divorce and all the financial mess they lead to would make buying a house all but impossible. Thankfully, if you want a home there are ways around the problems if you’re willing to follow some advice.
According to a recent Yahoo piece, the key to getting a mortgage after a split is in providing the most full picture of your financial life. You have to assist the bank in understanding your financial situation by showing them your divorce decree, any and all child support obligations and any spousal support payments that go in or out of your accounts. All these things can play a role in whether you will be approved for a loan and it’s best to hand them all over to your banker right away.
The good news if you receive money in the form of child support or alimony is that you can count this income towards what you need to qualify for the mortgage. So long as the income is set to continue for three years then the bank will consider that income stream as part of your application. However, if you are the one making child support or alimony payments, the bank will reduce your borrowing ability as this income cannot be counted towards what you could contribute to your mortgage.
If you were divorced a long time ago you might not realize that the mortgage company will still want to see your divorce decree. Though it may seem surprising given the time that has passed, there’s no statute of limitations on mortgage underwriting and the bank will want to make sure you are not financially on the hook for anything even decades after a split.
If you own a house and are still listed on the mortgage with an ex-spouse you might not think it would be possible to ever qualify for a new mortgage of your own. Fortunately there’s hope. If your divorce decree clearly states that your spouse was given the home in the split and your ex is willing to provide documentation that shows they make the mortgage payments on the property for the past 12 months, then the new mortgage company will omit your ownership from your new application, vastly improving your ability to qualify. Another possibility in cases like this is to explore the idea of having your ex refinance you off of the loan. This way you’re totally in the clear in the event that your former spouse stops making payments.
If you find yourself facing the prospect of complicated divorce and have questions about your rights and options, contact an experienced Ohio family law attorney who can help guide you through the difficult process. Count on the expertise of Twinsburg family law attorney Carol L. Stephan.
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