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Alimony impacts ability to get mortgage in California

When a person is considering purchasing a new home, they might not be aware that receiving or paying alimony can impact their ability to get a mortgage. Lenders have to look at a person's whole financial history before making a decision on whether to award the mortgage, and alimony payments can become the difference between being accepted or denied.

If a person receives alimony payments, the money might be considered income if it meets certain criteria. Lenders look at the amount received, how stable the payments have been in the previous six months and how long they will be continued. If the ex-spouse has not been consistent the payments, then lenders will usually not allow the prospective borrower to count it as income.

On the other hand, if a person is paying alimony, the amount paid is considered debt by the lenders if there is a history of payments and the payments will continue for a significant amount of time. If this amount, combined with other debt amounts reaches more than 30 to 45 percent of the prospective borrower's income, then the mortgage might be denied.

When alimony is involved in a borrower's financial situation, he or she needs to be ready to present all divorce documents that relate to his or her financial history so that the lenders can make an informed decision. If the alimony agreement is verbal, the lender might require that a notarized document be drawn up by a lawyer that provides all the details of the agreement and that further proof of the payments are also provided, such as bank statements. The borrower might benefit from the information and assistance a family law lawyer can provide about getting financial information ready for lenders.

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Miller & Associates, Attorneys LLP

Miller & Associates, Attorneys LLP
6542 Lonetree Boulevard
Rocklin, CA 95765

Phone: 916-780-0848 
Fax: 916-780-0787

Miller & Associates, Attorneys LLP
850 Iron Point Road, Suite 113A
Folsom, CA 95630

Phone: 916-365-4941 
Fax: 916-780-0787


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