Friday, July 12, 2013

Applying for a mortgage after a recent divorce

If you are recently divorced, you may be looking for new housing. There are several items to keep in mind if you are purchasing a home and need to apply for a new mortgage.

Fannie Mae provides guidelines and rules for recently divorced individuals regarding mortgage approval for those who receive child support and alimony. To use child support or alimony as qualifying income, you will need to document that it will continue to be paid for at least three years after the date of the mortgage application. The lender will require a copy of the divorce decree or separation agreement (if the divorce is not final) that indicates payment of alimony or child support, states the amount of the payment and the period of time over which it will be received. If a borrower who is separated does not have a separation agreement that specifies alimony or child support payments, the lender should not consider any proposed or voluntary payments as income.

Fannie Mae also requires a check of the age of the children to determine the duration of the child support payments. There also needs to be a receipt of support payments for no less than six months, which means you typically have to wait at least six months after a divorce to consider support and alimony as income.

United Home Loans provides Illinois mortgage loans as well as Indiana, Michigan, Minnesota and Wisconsin. If you are recently divorced and have questions about financing a property in any of these states, please call us today.

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