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How Does Child Support and Alimony Affect Qualifying for a Home Loan?

A divorce is an emotional upheaval regardless of how amicable the parties try to be. One important factor is housing as at least one party will be moving out of the home, and maybe both people will be looking for new, more affordable living arrangements.

During the divorce, it’s common for one person to owe the other some form of alimony (spousal support) and/or child support.

So, in the search for a new home, how does alimony and child support affect the ability to qualify for a new mortgage? Can a spouse with no income other than alimony and child support buy a home?

You may be surprised at the answer. For the purposes of qualifying for a loan, alimony and child support may be considered regular, long-term income, and lenders may use it to qualify someone for a loan as long as they meet certain requirements. Usually, these requirements include:

  • You have a court order or legal document that specifies the amount and terms.
  • You have been receiving the full amount owed for the prior six months and have documentation.
  • That the order states the payments will continue for at least 3 years.

As long as these conditions are met, most lenders may include these payments as part of the borrower’s gross income. On the flip side, for the spouse making the payments, lenders may deduct these costs from their gross income.

Make sure to check with your lender to learn more about if your alternative income qualifies.

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