Your ex can make your mortgage application difficult

You’re trying to purchase or refinance a home. You have an ex that you’re dealing with that you were either married to or on the title to a property with. The mortgage process depends on what that communication looks like with that other person. It could be very easy or more technical and challenging. Yes, it can be done. However, it does require careful consideration, planning, and a little bit of compromise depending on the mutual goals. Here’s what you should expect if you’re doing a mortgage transaction and you have an ex that is a party to your financial situation.

Something important to know for community property states. If you’re looking at government financings such as VA financing or FHA financing, those two programs specifically require the lender that you’re working with to pull a credit report on your spouse. Why? You’re still legally married and live in a community property state or are financing a property where the subject property is within a community property state.

So, you’re buying a new primary home, you’re still legally married, and you’re looking at a conventional loan. Your ex will need to sign off a release or the lender will need a fully signed-off divorce decree complete with the marital settlement agreement with all pages and schedules. You’re trying to buy a primary home but you’re also on the title and a mortgage with your ex on another property. They make the mortgage payment, but they’ve only been making the mortgage payment for a few months. This is going to be a problem. This other property is going to be in your debt-to-income ratio unless your ex can either sell that property or refinance their property taking you off the mortgage and title. Thereby removing it from your debt-to-income ratio. Or the payment needs to come from a bank account that you’re not on for the most recent last 12 months. Then that property can be omitted from your debt-to-income ratio meaning that that mortgage payment will not be counted against your debt-to-income ratio.

This is where it becomes challenging. If you have a good relationship with your ex, and they’re willing to cooperate and help you the process can be made substantially easier. If things are rocky between you and your ex, and you need their help you’ll have to plan for the time it’s going to take to let the divorce proceedings play through or have them sell or refinance the house. Every situation is slightly different. It does depend on the state in which the property is located. If you have a situation like this, it’s best to plan accordingly with a good lender who can walk you through the ins and outs of what this looks like. As well as how it might impact your bottom line as it relates to your mortgage and financing goals.

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