There are ways you can offset the impact child support and alimony payments have on your income statement. Don’t stop making your payments just because you’re ready to buy a home.
Put your documents in order
Before you approach a lender and ask about a mortgage, gather the following documents:
Copies of your debts: keep copies of receipts for all your monthly expenses, including rent, utilities, credit card minimum payments, child support, and alimony payments you pay or receive, along with other debts, such as loans students and the car.
W-2 tax forms for the last 2 years: Mortgage lenders generally require at least 2 years of W-2s from your employers. If you have more than one job, include W-2 forms from the last 2 years for all your jobs.
Tax documents of the last 2 years: Mortgage lenders may require you to submit 2-year tax returns to verify your income, especially if you are self-employed or an independent contractor. Most lenders won’t lend you money if you haven’t been self-employed for at least 2 years.
Proof of alimony or maintenance payments for minors: You should make copies of all checks you receive and print bank statements that show your ex-spouse made the payments for at least 6 months. Include documentation that proves that your ex-spouse must make payments for at least 3 more years.
Documentation of any other source of income: If you have another source of income, such as a pension, survivor benefit, regular commissions, overtime from your job, or annual bonuses, you can count it toward your income, as long as you can document it.
Keep in mind that your income, alimony payments, and DTI are just pieces of the mortgage application puzzle. Your lender also looks at your credit score and the amount of money you have for a down payment.
