Divorce and Mortgage Questions
Divorce and Mortgage Questions
A divorce is one of the most difficult things two people can go through and finding a mortgage after a divorce is not always easy either. If you would go back in time and do things differently as it relates to your mortgage and home, it probably would have been best to put just one spouse on the mortgage with both on the deed. However, since we cannot roll back history let us help walk you through the options.
Top Mortgage Problems to Solve During and After A Divorce
- Mortgage in my name only after a divorce
- Unable to refinance after divorce
- Refinance to remove spouse from mortgage
- Assuming the mortgage after a divorce
- Qualifying for a mortgage with alimony and child support
- Qualifying for a mortgage after a divorce with no job history
I will answer these all for you down below. First, here is some basic information about a divorce mortgage.
Benefits of a Divorce Mortgage
- We will help you to qualify without a full two year work history
- If you are paying alimony and or child support, we can help you to get qualified even with those monthly obligations.
- We understand this is a difficult time and there is a lot to deal with. Let us help to get you through this mortgage process easily and on a timeline that works for you.
Selling Your Home After A Divorce
Selling your home after a divorce is probably the best way to manage the asset during this difficult time. That being said, here are some of the things that are not so easy to deal with.
- Difficulty finding financing after the sale to buy a new home
- Moving the kids (if there are any) from their home to a new place
When you sell the home, you do not have to deal with removing your ex-spouse’s name from the mortgage or the deed.
Refinancing After a Divorce
In most situations, one spouse will keep the home while the other will move on. This is not always easy though. Here are two scenarios which could make it difficult.
- Scenario 1 – A recently divorced woman who spent the past few years as a home maker now must qualify for a mortgage without a two year work history. If she cannot refinance, it may mean that she must sell the home.
- Scenario 2 – A recently divorced man is looking for a new home. His prior home was left to his ex wife. He is having difficulty qualifying for a new mortgage because the alimony and child support payments are elevating his debt to income ratios.
There are other scenarios that play out similar to these. If you are having trouble qualifying OR of you want to speak with someone to make sure that you do, then click to connect with a divorce loan professional who can discuss your scenario with you and come up with a plan.
Buying a Home After Your Divorce
Recently divorced individuals sometimes have a tougher time qualifying for a loan vs someone who is self employed. You can still get it done though. Here are some things you should consider doing to prepare yourself.
- Do everything you can to have that 2 year work history
- Make sure that you do not do anything during your divorce that will negatively impact your credit
- Do your best to reduce the amount of monthly payment obligations that you have. So, don’t go and buy a new car until after you buy your home or refinance.
- Save as much as you can
- Speak to a loan professional well before you are ready to apply for a loan
Mortgage in My Name Only After a Divorce
If you are refinancing or buying a home without your spouse after a divorce, you should be able to get the mortgage in your name only. If it is a refinance, you will need to provide the divorce decree (where it shows the home is now yours) to the lender so they can refinance without involving your ex spouse. You may have to get your spouse’s name off of the deed first.
If you are going to purchase a new home without your ex-spouse, then there should be no problems at all here as long as you can qualify for the loan.
Unable to Refinance After a Divorce
If you are unable to refinance your existing home after the divorce, you need to determine whether you cannot qualify or if there is a problem with your ex-spouse having ownership in the property. The ownership situation would need to get resolved by your attorney. If you are having qualification problems then we can help you with that with our divorce loan program.
Refinance to Remove Spouse From the Mortgage
Quite often the home is left to one spouse and part of the divorce settlement agreement is for the spouse who is keeping the home must refinance to remove the other spouse from any debt related to the home. The problem is often the ability to qualify for that refinance. Another issue could be that the home is worth less than the current mortgage which makes refinancing impossible.
Assuming a Mortgage After a Divorce
When you have to refinance to remove the spouse from the mortgage, some people try to “assume” the mortgage by having the lender remove the other spouse from it. This is extremely difficult and often does not work. The original mortgage was approved with the financial benefit of both spouses’ income and credit. Removing one from the mortgage is risky for the lender. As a result, they will likely require you to refinance.
Qualifying for a Mortgage with Alimony and Child Support
It is not easy to qualify for your next home after a divorce if you now have alimony and child support payments showing up as a monthly obligation. This usually makes your debt to income ratios too high to qualify for the home that you want. One of the benefits of our divorce mortgage program is these two payments are considered to be a reduction of income instead of a monthly obligation. This changes the ratios and makes it much easier to qualify.
Qualifying for a Mortgage After a Divorce with No Job History
After a divorce, there is often one spouse who was the stay at home mom or dad and was not in the workforce for the past few years. As a result, he or she will not have the full two year work history that is usually required to qualify for a mortgage. The other great thing about our divorce mortgage program is it waives the two year work history requirement down to just 6 months.
Quitclaim Deed After a Divorce
If you are simply looking to remove a spouse from the deed, you can have your attorney put together a quitclaim deed. This will accomplish that BUT it will not remove their name from the mortgage. Even a divorce settlement cannot erase a borrower’s liability on a mortgage. Warning.. if you walk away from a divorce leaving your spouse with the home, that is fine. However, if your name is still on the mortgage you are trusting that your ex will not ruin your credit at some point in the future.
Divorce Loan Program Options
Lenders are constantly changing their guidelines and the tough part for you in researching this is that most of the time they do not communicate those guidelines well to the general public. You cannot just do a google search to find the right loan program for you. Plus, since they are chancing you will need to rely on us since we are on top of all of those changes. Below are some of the basic programs that can help you if you have a two year work history.
- FHA Home Loan After a Divorce – Can finance 96.5% of the loan and the rates are competitive. Some lenders accept lower scores too.
- USDA Loan After a Divorce – If you live in what the USDA considers to be a rural area, you may qualify for this loan and there is no down payment required.
- VA Loan After a Divorce – If you are a vetaran, you may qualify for a VA loan which also has favorable terms.
There may be other unique programs that ONE or two lenders may offer. Click here to let us help you to find them.
Divorce and Mortgage Questions
Can I get a mortgage after a divorce? Finding a mortgage today after a divorce is easier today with these great programs. The ability to waive the two year work history and to deal with alimony and child support payments differently is a game changer for divorced individuals.
Can I get a mortgage with just alimony? If the alimony payments are sufficient for you to qualify then they can be used as income for your mortgage. The divorce decree can also be used for proof of continuous income. You may also need to have received that alimony for at least 6 months before the lender will use it for qualification purposes.
Can I find a loan without a two year work history? With this special program we can help you to qualify with a minimum of 6 month work history. You may need to write a letter detailing the reasons why you do not have a full two year work history.
Can I keep my current mortgage after the divorce? You may be able to keep your current mortgage after your divorce. If your ex-spouse is also on the mortgage then he or she may when the name removed. Make sure that you have your attorney review everything to protect you.
Are their special loan programs for divorced people? Some lenders do offer special programs including programs that waive the two year work history for divorced individuals.
How does alimony affect mortgage qualification? Alimony is typically considered to be a monthly obligation but there are lenders that use alimony as a reduction of income which helps your debt to income ratios when qualifying for a mortgage.
Can I buy a home during a divorce? You can buy a home while getting divorced but you should work with your lender in advance to be sure that you are taking all of the steps needed to qualify and close the loan.