How does paying alimony affect my ability to get a home loan?

At that time I would be able to toss your alimony out since it will not be continuing for more then the 10 months, we will need the decree though showing the end date. If you have any questions let me know. if iwas you i would think about trying to purchase earlier. BY then values and rates migth be higher. Ig you would like to go over your options or to get pre-approved just contact me. thanks Michael

First, Alimony payments are deductable on federal tax returns. Therefore, although the amount is taken into consideration in debt/income ratio analysis, it is conceptually offset at the end of the year, or, on or before April 15th. Second, your question is actually vague. Just because you make payments to an ex-spouse does not mean it is Alimony. I say that because, you projected an end date to the payments. Alimony generally come to an end when an ex-spouse remarries. If you in fact are paying child support, rather than alimony, per se, the deduction rule is different. In any event, either debt will affect your ability to secure a comfortable enough loan to purchase a home. I would suggest that, you speak DIRECTLY to a reputable financial institution, rather than a Broker or RE Agent. In that instance, they can give you a better picture of where you need to be financially. It may merely be a matter of "getting rid of a car", if you drive a certain car with high notes. See IRS Publication 17 for more information on the payments. So, if you can offset that particular expense to show a greater income, then you may be in a good position, especially since you are talking about a year from now (nice planning, rather than being spontaneous)

It depends on the program you will use, Conventional or FHA, as they have different underwriting guidelines. I would say you can do either. FHA - we can treat alimony as reduction in gross income, rather than monthly debt if we have to take it in consideartion. Conventional, it's at the underwriter's discretion. I can tell you that assets will come into play here. A strong file it's a go!

It's long term debt, another financial commitment

Your alimony comes into play in the income to debt ratio. You can purchase a home based on your income to debt ratio. Speak to your lender about your alimony and see what they say. If you can save for a down payment even while paying alimony, that may prove to the lender that you have enough money to purchase a home and continue to pay the alimony for the next 10 months. Good luck to you.

It would be advisable to select a loan officer NOW who will work with you on positioning yourself to buy at the end of your lease. Also you would benefit from choosing a real estate agent now who can keep you informed about the market, communicate with your loan officer and be ready to "MOVE" when you are. Thelma Ratliff, Principal Broker, A New Century Realty