divorced couple walking away from each other

If you’ve been through a divorce, you know there may be a million little things to work out in the divorce process. If you’re a homeowner with your former spouse on the mortgage, one of the items you must address, usually after the divorce, is how to handle your house.

If you’re going to stay in the home, you may need to refinance to remove your ex from the mortgage. Maybe you’re looking to use child or spousal support payments from the divorce to help you qualify to buy a new house. Your mortgage lender will need to make sure you financially qualify to make the mortgage payments. In addition, they’ll take a look at documentation to see if your spouse was paid a consideration, or monetary amount, for their equity stake in the property.

Let’s take a look at how your divorce documents are part of this picture.

Child Support or Alimony Payments

If you’ve had children together, child support might be part of the qualification process. The same holds true if one of you has been ordered to pay spousal support to the other as part of the divorce agreement.

If you’re the party receiving the financial support, the money could help you qualify for the mortgage. Child support and alimony are considered acceptable sources of stable income if they’re scheduled to continue for at least three years after the mortgage application or closing, depending on the type of loan you apply for. You also have to document a history of receiving the payment.

On the other hand, if you’re the spouse paying child support and/or alimony, this is a recurring monthly expense that is counted in your debt-to-income (DTI) ratio. However, there are circumstances in which the payments can be excluded from your DTI.

At Quicken Loans, if you have to make just 10 or fewer child support or alimony payments, this debt doesn’t have to be included on conventional and jumbo loans (nine for VA loans). It may be possible to exclude this debt with an FHA loan, but the requirements are a little more complicated: Be sure to talk this over with your lender.

Considerations Paid

Your lender will also need to see divorce documents to glean if any consideration was paid to your ex-spouse for their equity in the home. The lender needs to know the dollar amount before they can have a quitclaim deed processed to take them off the title.

The purpose of having the figure documented is to make sure the payoff is agreed to before your ex is removed.

Documentation Needed

To verify the property-related terms of the divorce, lenders may request any of the following documentation from you:

  • Divorce decree
  • Final separation agreement
  • Divorce-related legal agreement
  • A settlement signed by the judge

If you are receiving child support and/or alimony payments, a Friend of the Court letter may work instead. If child support payments can be excluded from your DTI, a copy of each qualifying child’s birth certificate can be used to verify their ages.

The divorce process can be time-consuming. If you still have questions, let us know in the comments. We’ll do our best to find the answers.

Related Posts

This Post Has 6 Comments

  1. I’m divorced and want to sell my house. My mortgage company says I can afford the payments so I don’t qualify to sell? Why is that?

    1. That’s definitely weird, Tammy. If you got the home in the divorce, you should be able to do whatever you want with it.

  2. I am in the process of finalizing my divorce and my question is this…

    How many spousal support payments do I have to show I have received in order to qualify for a mortgage?

    Thanks!

    1. Hi Kristin:

      It depends on the type of loan you’re trying to apply for. If it’s an FHA or VA loan, we have to see at least three months of receipt. It’s six months for conventional loans and one year for jumbo loans. In order to use it to help you qualify, it has to continue for at least three years following the closing date for FHA and jumbo loans. For conventional and VA loans, it’s three years from the application date. Hope this helps!

      Thanks,
      Kevin Graham

  3. We own a land, no encumbrances, held as joint tenants as husband and wife. It was awarded to me in Divorce Decree. My ex refused to sign quit claim. It has been about 6 months since the last time I texted him and spoke on the phone. I’ve tried asking him several times in the past years. He stopped answering phones and texts. I don’t know where he lives. I’d like to sell, but knows it’ll be a problem once his signature is needed.

    1. Hi Cora:

      At this point, I would consider getting an attorney involved and asking what your next steps are. Unfortunately, we don’t do anything with loans on empty land, but this sounds like an issue of finding a way to get him off the title anyhow. If it was awarded to you in the divorce decree, it’s yours. The question is if you can use the legal system to either invalidate his stake or compel him to sign the quitclaim. For that, you’re better off talking to a lawyer.

      Thanks,
      Kevin Graham

Leave a Reply

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