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

Asked by: of Winchester, VA on 2012-12-11T14:55:41Z

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

2012-12-11T15:26:00Z

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.

2012-12-11T16:07:12Z

It's long term debt another financial commitment

2012-12-12T15:33:46Z

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

2012-12-12T19:31:51Z

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

2012-12-16T19:26:28Z

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.thanksMichael

2012-12-17T22:06:52Z

This seems like a unique situation that most experienced loan officers are used to dealing with. The best thing you can do is sit down with a loan officer and explain the situation in its entirety. They will be better suited to answer the question with a full answer free of charge. If you would like to schedule a sit down please do no hesitate to contact me.

2013-12-04T19:13:22Z