Mortgage Options After a Divorce: Important factors to remember when refinancing or purchasing a home

Refinancing or purchasing a home after a divorce can be challenging, but knowing some basic criteria before application will help you know what to expect and some minimum requirements you will have to meet before applying for a mortgage. The following are some guidelines to help you:

Spouse entering the workforce after an extended absence:

• Must be on new job for at least 6 months (W2 income)

In order to use Child Support or Spousal Support as income:

• Must have been received for at least 6 to 12 months (exact duration will depend on loan program and investor)
• Must be received on time each month (borrower to provide evidence of this)
• Must be supported by court order or fully executed property settlement agreement
• Must have a continuance of at least 3 years beyond the settlement date

How joint debt factors into the debt to income ratio:

• Depending on the loan program and investor, some joint debt can be excluded based on the wording of the property settlement agreement. (if there are late payments on that debt, regardless of the wording in the agreement, it will be included in the debt to income ratio)

Philadelphia Mortgage Advisors' experienced staff can help you move forward after a divorce. Please contact us for more information.