Getting a Mortgage after a Divorce

You and your ex spouse most likely have a combined financial history that probably includes; a mortgage or 2, car loans, student loans and credit cards.  Buying a home after a divorce with common debt that survives the divorce can make it tricky getting a mortgage.   It can also leave your credit exposed if old loans/mortgages are not refinanced out of your name.  Also,  being “quick claimed” off a deed does not exclude you from being marked late down the road.

There are several factors that your mortgage officer will need to know when considering you for a mortgage. 

If the ex spouse is keeping the house and responsible for making the mortgage payments on a mortgage that you are also obligated to pay.   

You will need to provide the lender with a court approved Divorce Decree that awards the property to your ex spouse and provide 12 months of cancelled checks showing that they have made the mortgage payments from their own account, not your joint account.  The mortgage payments will have to have been made on time during this period as well.  You will also want to explore the option of having your ex refinance you off of the mortgage obligation. 

Child Support and Alimony.   

This income can be used to qualify you for a new mortgage as long as it is spelled out in the Divorce Decree.    You will need to show proof that the income has been received for at least the past 6 months and it is going to continue for at least 3 years from the date of the new mortgage.   Conversely, you are required to disclose any child support or alimony obligations you may have which could affect your qualification ratios. 

If you have other joint obligations such as car loans, student loans and credit cards. 

Unless it can be documented in the Divorce Decree that the other party is responsible to pay the obligation, and supported by 12 months checks showing that they make the payments, those liabilities will be factored into your ability to qualify for a new mortgage.

If you are not yet divorced and are planning your future, you will want to create some sort of marital separation agreement.   This will help your loan officer in determining your loan options.  It is also a good idea to separate your finances which means getting your own bank accounts and paying your financial obligations from separate accounts.