…When Can You Use it to Qualify for a Mortgage?
As you contemplate and work through a divorce, one of the most important factors to consider is your housing needs in the future. Will you stay in the home that your living in or sell the house and move somewhere else? We can’t overstate the importance of getting with a mortgage professional as you begin to negotiate your marital settlement agreement. There are very specific guidelines revolving around the use of child support or alimony. Support payments must be received for a specified number of months to use it as qualifying income and it must continue for a set period.
If you are doing a conventional loan, you must receive the income for a minimum of six months and it must continue for a minimum of three years after the loan application date to use it as qualifying income. The tricky part with this is trying to determine when you will apply for a loan, since this is the starting point for the three-year period. If you are doing a government loan such as a FHA or VA, you only need to receive three months of support payments, but it still must continue for a minimum of three years after application. If you feel like your negotiation may take some time but you can agree at least on support payments, it is possible to do a temporary separation agreement to expedite the upfront support payments for qualifying.
Working with a mortgage professional as part of your team, early in the process, ensures that you can meet all your future housing goals.
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The FMT