I had a client last week call me about understanding what it looks like to finance a home when going through a divorce. And fortunately, I do a lot of business with family law attorneys, and the right planning can really make it easy. Let me walk you through very quickly what it looks like.
There’s usually two options when you get divorce and there’s real estate for disposition. Sell it or refinance. Selling easy, right? Sell the house. Each person gets their share of the money and everyone goes on their way. The refinance is a little more common. There’s two important things to know. If you’re the spouse who’s going to pay alimony or child support, that will become an expense.
When you try and qualify for the new loan now, sometimes you’re refinancing just to buy out the other spouse from the loan. Maybe you’ve got a test and cash out to also buy the note. Either way, that future expense goes down now, so you have to use that in order to qualify. The second one is what about if the spouse is going to receive alimony or child support?
If we need that for income to help qualify, you’ve got to have at least six months of it. Now, my my really good, proactive family law attorneys will actually discuss this in the beginning. You can start receiving this before the final divorce is done. That way you don’t have to finish a divorce and then wait for six payments.
You can actually start getting the six payments now to help to use qualify for income. Do you have any questions? Let me know. Have a great day. Thanks.