Divorce can make buying or selling a home difficult. Recent federal regulations affecting mortgage lending makes navigating the mortgage process even more difficult. That’s why we partnered with a mortgage expert who is also passionate about helping divorced or divorcing couples – Brent Leschinsky from Venture Bank.
Brent has been a mortgage loan officer for 14 years and over the past few years has really focused on divorce. He was featured on WCCO’s Real Estate Radio Hour to discuss common mistakes divorcing couple make.
We had a great discussion about mortgage lending at our September 14th meeting. Here are some highlights:
Question: What’s one of the most important factors in getting a mortgage?
Answer: Well, there are many. Your credit score is one. Another important factor is your debt-to-income ratio (all debt payments / gross income). If that ratio is below 40%, that’s good. If it’s not, don’t worry too much as there may be federal home lending programs in which you may quality.
Question: What if I pay spousal maintenance and child support?
Answer: Both spousal maintenance and child support are like a loan payment and they would be included in your debt to income ratio.
Question: I am signing a Quit Claim deed. Does that take me off the loan for the house?
Answer: No, it does not take you off loan for the house, it takes you off the property title. It basically is a document that says you no longer have any ownership interest in the property, but the bank can still collect from you if payments are delinquent. Having your ex-spouse refinance the loan in her name only is the most common way to get your name off the loan.
Question: My wife collects child support and or spousal maintenance from me. Would she qualify for a loan to buy or refinance a home?
Answer: Maybe. The bank focuses on a principal called “ability to repay”. The ability to repay mean that the income sources are not only sufficient to repay all debt, but also that source of income will be available for at least three years after the mortgage loan is opened. So if you are structuring your spousal maintenance, make sure you consider the duration of spousal maintenance so your spouse can include that amount in her income.
These are just some of the questions and a small part of the answers Brett provided at our meeting. To learn more about mortgages, feel free to call Brett at 612.590.7896. And even better yet, come to a meeting to get your specific questions answered, connecting with like-minded men and hear ALL of the answers to the questions.