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Archive for the ‘Divorce and Separation’ Category

Divorce and Alimony and the Effect on Your Mortgage

Thursday, October 14th, 2010

Transcript of Video Blog:

Hi, everyone. Rowan Smith with the Mortgage Centre. I want to talk to everyone today about divorce agreements, alimony, child support, and that kind of thing and how they affect your mortgage application. A lot of times people will fill out on their application that they’re divorced. Maybe they are even buying a property with their new partner and the bank will ask them for a divorce agreement. And the person will say to me, but that was 15 years ago. Well, it doesn’t really matter. The bank still is going to want to see that document.

You’re going to have to disclose it. Now, you wonder why that is. There’s a few things that could be in a divorce agreement. For example, there could be alimony, spousal support, child support, any of these different things. Now that monthly payment is just like a debt. It’s just like a car loan. So it’s an obligation which affects your income, your bellied service debt. So a lot of times people will come to me and tell me: how much am I qualified for, I make $100, 000 a year? I spit a number back at them and then when we’re going through the application they inform me they have an $800 a month child support payment.

Well that has a very large impact on what they can approve for. So if you have been divorced tell your mortgage broker upfront if there’s any sort of alimony, child support, spousal support payments or any other continuing payments and obligations for anything you and your spouse may have had together. It may seem insignificant but these institutions are lending you hundreds of thousands of dollars so you can bet darn right that they have the right and will ask for this information. For the Mortgage Centre, I’m Rowan Smith.