Voluntary child support payments are the right thing to do in many cases when going through a divorce but how does that affect mortgage financing? Qualifying for a mortgage during or after a divorce may seem cumbersome to many with the proof of receipt of income, copies of documents and more. But what if there is no divorce? What if there is no court order for child support and all payments are voluntary? Can voluntary child support be used as qualified income when applying for a mortgage?
Yes, voluntary child support may be used as qualifying income for a mortgage but you may be limited to your options. FHA mortgages will accept voluntary child support as qualifying income; however, you will typically need to show twelve (12) months proof of receipt; proof the support will continue for a minimum of three (3) years after the new mortgage loan closes; and a written agreement between you and the parent paying the child support. This too can be hard for may underwriters to accept. How does one prove that the payments will continue?
Additionally, to be considered stable income, the child support payments must be full, regular, and timely payments. In addition, if full or partial payments are made on an inconsistent or sporadic basis, the income may not be acceptable for the purpose of qualifying for mortgage financing.
To further discuss how to utilize voluntary child support when obtaining mortgage financing, contact Richard Woodward, Your Certified Divorce Lending Professional. You can also visit our Facebook Group Divorce Resources in Dallas and learn more here, Divorce and Your Mortgage.
A professional divorce team has a range of team players including the attorney, financial planner, accountant, appraiser, mediator and yes, a divorce lending professional. Every team member has a significant role ensuring the divorcing client is set to succeed post decree.
A Certified Divorce Lending Professional brings the financial knowledge and expertise of a solid understanding of the connection between Divorce and Family Law, IRS Tax Rules and mortgage financing strategies as they all relate to real estate and divorce. Having a CDLP on your professional divorce team can provide you the benefit of:
- A CDLP is trained to recognize potential legal and tax implications with regards to mortgage financing in divorce situations.
- A CDLP is skilled in specific mortgage guidelines as they pertain to divorcing clients.
- A CDLP is able to identify potential concerns with support/maintenance structures that may conflict with mortgage financing opportunities.
- A CDLP can guide you on how to avoid potential capital gains concerns with regards to the disposition of marital real estate.
- A CDLP can help you implement a strategic divorce settlement agreement ensuring the best opportunities to secure mortgage financing post decree.
- A CDLP is able to recommend financing strategies helping divorcing clients identify mortgage financing opportunities for maintaining current marital home while helping to ensure the ability to achieve future financing for departing spouse.
- A CDLP is qualified to work with divorce professionals in a collaborative setting.
- A CDLP can provide opportunities in restructuring a real estate portfolio to increase available cash flow when needed.
- A CDLP maintains a commitment to remaining educated and up to date in the ever changing industry guidelines and tax rules as they pertain to divorce situations.
- A CDLP is committed to providing a higher level of service to you and your divorcing clients.
Richard Woodward, NMLS 217454
Your Local, Direct, 5 Star Rated Mortgage Lender, Specialty Lending Manager
Office: (214) 945-1066
Service First Mortgage NMLS 166487
6800 Weiskopf Ave #200, McKinney, TX 75070
Licensed by the Texas Department of Savings and Mortgage Lending (SML) Mortgage Banker Registration. Service First Mortgage is an Equal Housing Lender. This is not an offer of credit or commitment to lend. Loans are subject to buyer and property qualification. Rates and fees are subject to change without notice. The views expressed on this site are those of the individual author and do not necessarily reflect the positions, strategies or opinions of Service First Mortgage or its affiliates.
This is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact an attorney or tax professional to obtain legal and tax advice. Interest rates and fees are estimates provided for informational purposes only, and are subject to market changes. This is not a commitment to lend. Rates change daily – call for current quotations.