Getting a Mortgage After Divorce

February 1, 2018 — 2 min read

Qualifying for a mortgage can be challenging under the best circumstances. Adding a divorce to the situation makes it even more difficult for a borrower. A divorce may be the end of the marriage but individual finances can remain entwined for years, adding to the challenge of qualifying for a loan. Mortgage lenders qualify a borrower based on debt-to-income (DTI), making it important to realize the following liabilities are considered part of the borrower's ability to qualify:

Child support/alimony obligations

These financial obligations will reduce the borrower's ability to qualify. This is because they are looked at as debts, reducing the borrower's income.

Joint accounts including credit card debt, student loans, and automobile loans

These liabilities are considered the co-responsibility of the borrower unless it can be proven that the ex-spouse is responsible for the obligation; 12 months of canceled checks or bank statements may be required. Despite the challenge of these liabilities, many borrowers can successfully get a mortgage after a divorce. The following can help the borrower qualify:

Disclose receipt of child support and/or alimony

This documented support will be considered income and may help qualify for a mortgage if it's included in the divorce decree.

Credit cards and joint accounts

The potential borrower should close all joint credit accounts including credit cards, car loans, etc. The borrower's credit report will contain any unpaid debt or late payments incurred by the ex-spouse.

Provide evidence that the ex-spouse is responsible for the current mortgage

If the borrower did not retain possession of the home after the divorce, they will need to provide evidence that the divorce decree awards the home to the ex-spouse. Also that he/she is willing to provide evidence that they make the mortgage payments on the home.

The good news is that despite most divorce situations, many borrowers can successfully qualify for a mortgage. If you have questions, please contact us!

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