Child Support and Alimony – Qualifying Income
Mortgage lenders can use child support and alimony income as qualifying income as long as we have proof of continuance for the next three years. Lenders will require a copy of your divorce decree and support order. Lenders need all pages of it, and it needs to be signed by the judge. Additionally, they’ll need proof of receipt of the support income for the most recent 3-6 months. This length depends on the loan program you’re using.
Child’s Age Restriction
For child support income, if the child you receive support for is 15 years old or will turn 15 before you close your home loan, we cannot use the child support income for qualifying. While there are support orders that award support for the child after the age of 18, there are usually stipulations on it. Examples include proof of enrollment in a college or university or that it’s paid directly to the child. These are things that lenders cannot adequately document, generally speaking, mainly because the documentation does not exist, so we can’t use that income in the file.
If there are multiple children that support is awarded to, lenders can use partial support income if one of them is 15 or older at the time the loan closes.
For example: a borrower has 3 kids, age 8, 12 & 15 and receives $1500/mo total for child support. Lenders will use $1000/mo ($500 each for the 2 kids under 15) as qualifying income unless there is a specific breakdown in the support order that dictates how the support changes when a child turns 18. If the support order details this, we use what the support order says for qualifying income.
There are a few types of other income, but they’re rarely used and don’t really warrant an explanation. If you have a situation that falls outside the income situations listed here, drop me a line and I’ll see if I can help you suss it out.