DIVORCE 911 consulted with Chris Philmon of Angel Oak Home Loans for this blog post.
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Whether or not you can afford to keep your house after divorce is a topic that comes up a lot. This comes up because people don’t necessarily understand the process of the mortgage underwriting process as it relates to income and assets moving forward. Let’s assume that the mortgage has been consistently paid on time during the marriage. However, once you have a divorce things can change… Whoever is keeping the house after the divorce needs to requalify on their own for a new mortgage. The main topics that are looked at are credit, assets and most importantly; income, income source, and the trend of that income.DIVORCE 911 consulted with Chris Philmon of Angel Oak Home Loans for this blog post.
Please check out our video library to view the video covering this topic.
Whether or not you can afford to keep your house after divorce is a topic that comes up a lot. This comes up because people don’t necessarily understand the process of the mortgage underwriting process as it relates to income and assets
There are of course other factors. If there is spousal maintenance, alimony, or child support generally speaking you need to be able to see a track record of 3-6 months before those items can be considered as income. There needs to be a trend of that person receiving it as if it were a regular paycheck. If someone is planning to reenter the workforce to provide income moving forward there are different policies for what is accepted. At Angel Oak Home Loans, we accept an offer letter as long as the start date is within 60 days for that person beginning their new employment.
In this day and age income as compared to what it was years ago is more heavily looked at. The underwriters have to see that trend/stream of income. To summarize that means seeing a track record of receiving child support or alimony. If someone is reentering the workforce there needs to be an offer letter. If someone has worked and will continue to do so then how that income is affected by these new debts and all of the new debt that they will be taking on will be closely examined. This will be done to make sure they can go through the refinance before these things are finalized with the separation agreement or divorce.
You don’t know what you don’t know. The marital house has a lot of responsibility tied to it. Seeking advice and help from a professional mortgage lender is the best way to go about this. This will allow you to get a clear picture of what your financial lifestyle will actually look like. Post-divorce, your income will have been cut in half and your expenses basically doubled. All of your bills become yours and yours alone to pay.
This information is deemed to be accurate. Reader / User is required to perform their own due diligence with the appropriate professionals. DIVORCE 911 is not a law firm, financial institution or advisor, registered mental health resource, does not practice law, and does not offer legal, financial, or therapeutic advice.