Single mom Qualifying for FHA loan

There are several considerations when a single parent comes to us to discuss purchasing a home and their financing options.
FHA is a great mortgage program for many single parents because of it’s flexibility. There are some qualifying details that are specific to Single Parents that you should consider:

• Child Support and Alimony must be documented for the past 12 months.  We will need to see cancelled checks, documented deposits in your account, or court records from the State showing that you’ve received at least 12 months of support in order to count it as a “stable” income source.
• It must be continuing for at least 36 more months after closing.  So if support will continue until your child is 18, and the child is 16 – we can not count that income.
• You can get a gift for the down payment
• You need to have a credit score of 640
• You can put a parent, or other family member on the loan to help you qualify
• We can not count rent you might receive from a roommate

If you were obligated on a mortgage with your ex-spouse, and you were NOT removed from the mortgage, we will count that payment against you. Often times, an attorney will advise you to quick claim deed the property to your ex-spouse.  This only takes you off of the DEED, if you were on the NOTE – you are still obligated for the mortgage.  Your spouse would have to refinance and take you OFF of the note, or sell the property,  to truly take that obligation off of you.
Court Recorded Seperation Agreements, stating that the other person is responsible for the debt, does NOT take the liability off of you.
If there’s a CAR payment, or another type of debt that you are still on the note for… and you can provide 12 months of cancelled checks showing where the other person is making the payments… we can SOMETIMES get that payment waived (in other words we might not have to count it as a debt when we are qualifying you).

Contact me today to see if you can qualify!  mwilkins@capitalfmc.com

http://www.themortgagemark.com 

Alimony, Child Support and Separate Maintenance--Does it Count as Income?

Alimony, Child Support and Separate Maintenance--Does it Count as Income?


When you apply for an FHA home loan, you're required to certify your income, offer proof of employment and show that you're a good credit risk with a history of on-time bill payments for at least 12 months. Many people have no trouble with this set of requirements, but some are not sure what to write down when it comes to reporting child support payments, alimony and other income as a result of a separation or divorce. How do you include income from alimony payments and other financial support in your FHA loan application? More importantly, how does the your lender regard such payments?



DOCUMENTATION



The first step in getting many lenders to recognize income from alimony, child support, or maintenance payments as a legitimate source of income is by showing proof that such payments are happening on a regular basis. Many couples who enter divorce proceedings agree to informal child support arrangements or alimony payments; unfortunately the lender is not obligated to recognize such arrangements as a legitimate source of income. In fact, some financial institutions have issued recent guidance that in order for alimony or other payments to be considered as income, there must be a court order or other legal documentation showing that one party is legally obliged to pay the other party. A divorce decree, formal separation or court order is sufficient in most cases.



AMOUNTS



When you apply for an FHA mortgage and list alimony or child support payments as legitimate income, your loan officer will examine the ratio of your other income versus the amount of child support or alimony you receive. Depending on the amount and your lender's policies, certain requirements govern how that income is to be considered.



For example, some lenders stipulate if alimony or child support is 30% of the household income or less, the following standards apply:





•The party paying alimony or child support must be obligated in writing to pay.





•The payer must have paid for at least half a year before the loan application is filled out.





•The payer must be obligated to continue paying for a minimum of three years after closing the sale.





•There must be evidence of "stable receipt" of the full amount of alimony or child support for the most current six months prior to applying for the FHA home loan.

When the amount of alimony or child support is greater than 30% of the FHA borrower's income, the rules can change. Some lenders require the following;





•The borrower must receive alimony or child support for a full year before applying for the loan.





•The payer must be obligated to continue paying for three years after the loan has closed.





•There must be evidence of complete, on-time payments for a full year before applying for the home loan.

•

It's important to remember that in all cases, if you apply for an FHA home mortgage and list maintenance, alimony, or child support, there must be legally binding paperwork acceptable to the FHA that spells out the amount of the payments and their duration. This helps document your actual income and gives the bank and the FHA a way to measure what you are able to reasonably borrow when shopping for an FHA mortgage.



Your financial institution has specific guidelines on these issues--don't assume terms are identical from one bank to another. It's best to ask up front about any sources of income from alimony and child support so you know how to properly budget for your FHA home loan.

Contact me at mwilkins@capitalfmc.com or visit http://www.themortgagemark.com/