Buying and Selling Homes in 2014: A More Balanced Market - Quicken Loans Zing Blog

Before setting out on your journey to find the perfect home after a separation or divorce, it’s important to save yourself some time and equip yourself with the proper information and documentation. Without the right help, legal terminology and court documents can be confusing. Longtime Quicken Loans banker Dennis Spensley and Quicken Loans underwriter Kerri Carpenter have some valuable insight for home buyers who have gone through a separation or divorce. Check it out!

If You’re Legally Separated

According to the experts, if you’re a separated home buyer, you’ll likely have to provide the lender with a final separation agreement signed by a judge. You also may need to provide a complete property settlement (if applicable). These documents will be reviewed for child support requirements, alimony requirements and property requirements.

Even though you are the prospective buyer, your spouse’s signature will likely be required on the home loan and on all related documents even if your spouse won’t occupy the new home. The good news is your spouse isn’t required to be on the title of the new home but, be sure your spouse can attend the scheduled closing to sign your paperwork.

If you’re looking to get off your old mortgage, you may be able to use a quitclaim deed (which transfers home ownership) of your existing property and removes you from the deed. Removing yourself from the deed of your existing property will improve your debt-to-income ratio, making it easier for you to qualify for your new house.

If You’re Going Through a Divorce

When you’re in the midst of divorce, getting a new home might be more challenging from a legal perspective because a home buyer is treated as a married person if no final divorce decree exists. Your spouse’s signature will likely be required on the new home loan and all related documents, even if your spouse won’t occupy the new home. Your spouse isn’t required to be on the title of the new home, but, your spouse will still have to sign your paperwork, so be sure they can attend the scheduled closing.

The divorce decree is valuable because it clearly outlines alimony and/or child support payment arrangements. Be aware that if you’ll soon be paying alimony or child support, then those debts also are factored into your debt-to-income ratio when buying a home.

If You’re Divorced

According to the experts, if you are buying a home after divorce, you must provide all pages of your final divorce decree or legal agreements. The divorce decree is critical because it may free you of responsibility for an existing mortgage. Additional documentation required may include paystubs of garnishment, copies of each child’s birth certificate, Friend of the Court letters or tax returns that show alimony payments. Be aware that if you’re currently paying alimony or child support, or you’ll soon start paying, then those debts also are factored into your debt-to-income ratio when buying a home.

For home buyers who’ve been divorced for a long time, the divorce decree is still very important because it outlines the financial terms of retirement/pension payments and military benefits if applicable. Divided  income can have big impact on your purchasing eligibility, so it’s important to present this information to your lender.

Divorce proceedings can sometimes have a negative impact on credit so if you’re a new divorcee, it may be helpful to calculate changes in your credit status ahead of time. Visit Quizzle.com for a free report and score.

Want to learn more? Find valuable info for separated and divorced home buyers at Divorce360.com.

 

Related Posts

This Post Has 4 Comments

  1. I do not agree with divorce policy. My husband and I did not need it when we got our house four years ago, but they need it to refinance? It does include child support, but child support is not included in our income. What makes it worse is when asked why it was needed……… we got the response not once, but twice now of ” Im not sure”. Its now day two an still no direct answer to the question. Cant really just walk away now since we had to pay “good faith” deposit on first day, an company has ran our credit multiple times. Starting to become very dissatisfied with the company and its practice- unprofessional.

    1. Hi Angel:

      I’m sorry to hear about your experience. I’m going to forward your comment to our client relations team to see if they can offer any help or advice.

      Thanks,
      Kevin Graham

  2. I find your policy on divorce a bit excessive I was divorced in 1988 my children are 30 and 32 and there was no personal property at the time to split or owe for – yet you are willing to deny a loan based on the fact that the County of Los Angeles cannot provide these documents for 16 wks to 6 months and me ex-husband is deceased and was married 4 more times after me.

    1. We’re sorry to hear you’ve had this poor experience with us. We are currently looking into your situation and someone will be reaching out shortly to figure out what’s going on here.

      Thanks,
      Kevin Graham

Leave a Reply

Your email address will not be published. Required fields are marked *