Mortgage after divorce

Mortgage qualification after divorce

Whether you are refinancing to keep the house or buying the next one, the lender is looking at one income, a decree, and a credit report that still shows the joint loan. Here is exactly what counts, what does not, and the order to do things in.

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Income

Support counts, with conditions

Decree, six months of receipts (three for FHA on court-ordered support), three years of continuance from closing.

Debt

The old loan may not count

A mortgage the decree assigns to your ex can be excluded from your ratios (Fannie Mae B3-6-05).

Credit

No recent lates

One 30-day late on the joint loan in the last 12 months is the most common reason a post-divorce loan fails.

Timing

Pre-approve before the decree

Then apply the week it is entered. A refinance takes 30 to 45 days; most decrees allow 60 to 90.

The short answer

Lenders count your wages plus maintenance and child support you have received for six months (three for FHA on court-ordered payments) and will keep receiving for at least three years after closing. Child support can usually be grossed up about 25 percent because it is not taxed. The joint mortgage counts against you unless the decree assigns it to your ex, or your ex is on the note and has paid it for 12 documented months. Conventional debt ratios generally top out around 45 percent, sometimes 50 with strong compensating factors; FHA can go higher. On the Denver buyout example, a $3,870 monthly payment needs roughly $108,000 of income at 43 percent with no other debt.

What the lender needs from you

The entered decree or court-approved agreement, not a draft, showing the house, the buyout, who pays what, and every support amount with its end date.
Proof of support received: bank statements or the state disbursement record.
The recorded deed from the leaving spouse (the title company handles it at closing on a refinance).
Two years of tax returns and recent pay stubs.
Your credit report, with the joint accounts explained by the decree.

The traps

Support that ends within three yearsCannot be counted for that portion. Colorado’s maintenance guideline ties the term to marriage length, so short-term maintenance often fails the test. Compare the decree’s end dates to the three-year rule before you sign.

A child who turns 19 within three yearsThat child’s support drops out of the qualifying income.

Lump-sum equalization paymentsNot income.

A missed payment by your ex on the joint loanIt lands on your report and can kill the loan. Watch the servicer account monthly until the loan is out of your name.

A refinance deadline nobody checkedIf the numbers do not work, the fallback is a sale. Find out before the decree, not after.

Buying during the caseMost lenders will not close a purchase during a pending divorce; the injunction and the unallocated debts get in the way. Wait for the decree unless your attorney gets an order.

Refinance versus purchase

Refinancing to keep the house

New loan = payoff + buyout + closing costs. Fannie Mae treats a divorce buyout as a limited cash-out refinance when jointly owned 12 months (up to 95 percent LTV); Freddie Mac as a cash-out capped at 80 percent. The lender picks the agency; ask.

The buyout math

Buying the next home

A mortgage assigned to your ex in the decree does not have to count against you. CHFA (no ownership in three years qualifies as first-time) and metroDPA (no first-time rule, $210,150 income cap) help one-income buyers.

Buying after divorce

Questions people ask on this page

How soon after divorce can I get a mortgage?

The day the decree is entered, if you can document income and the old loan’s treatment. There is no waiting period in the rules; the six-month support history and any recent lates set the real timeline.

Does alimony count as income for a mortgage in Colorado?

Yes, with the decree, six months of receipts (three for FHA on court-ordered support) and three years of continuance.

My ex was ordered to pay the mortgage. Why is it still on my credit?

Because the decree does not bind the lender. Only a refinance, a sale or a written release removes you. Until then, the lender can exclude it from your ratios with the decree, but late payments still land on your report.

Do I have to use your lender?

No. Mike Oswald at Rate runs these files every month and pre-approves on the decree’s numbers; you may use any lender, and we receive nothing for the introduction.

Lender note. Rules cited are Fannie Mae Selling Guide B3-3.4-02 and B3-6-05 and general FHA guidance; lenders add their own overlays. Mike Oswald, NMLS 261003, is an independent loan officer with Rate. Not a loan offer.

The divorce real estate division

One specialty. One designated specialist. One team behind him.

Damon L. Chavez is a Certified Real Estate Divorce Specialist and a Level I and II Collaborative Divorce Professional, a REALTOR® since 2000, a Certified Residential Appraiser, and has worked with divorcing couples for more than 12 years. He leads the divorce listing practice as an affiliate partner of The Kenna Real Estate Group; his own license is with RE/MAX Professionals, and we say so on every page. Brian Lee Burke leads the Kenna team and founded the free Colorado divorce workshop. Between them, by our count, the team closed more than ten divorce sales in the past year.

Designations verified on third-party listings, not just here

Neutral: one valuation, both spouses, both attorneys, at the same time

Court-ordered and stipulated sales handled the way the court expects

A licensed appraiser’s eye on value, plus a written Smart Pricing Report

Collaborative-divorce trained, so the sale does not restart the fight

A live person answers 303-955-4220. Ask for the divorce team.

Meet Damon · For attorneys and mediators · Book a discovery call

Plain-language education, not advice. Divorce Decisions is published by The Kenna Real Estate Group at Keller Williams DTC, a real estate team. Nothing here is legal, tax, lending or financial advice, and reading it does not create any professional relationship. Colorado law and lender rules change; confirm anything that matters to your case with a licensed Colorado attorney, a tax professional, and your lender. See our full disclaimer.

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