Avenue Mortgage, LLC

NMLS #1115220

  • Home
  • About
    • About Kay
    • Accessibility Statement
    • Complaint/Recovery Fund Notice
  • Blog
  • Our Resources
    • First Time Seller Tips
    • First Time Buyer Tips
    • Home Appraisal
    • Home Inspection
    • Loan Checklist
    • Loan Process
    • Loan Programs
    • Mortgage Glossary
    • Mortgage FAQ
    • What to Expect at a Loan Closing: A Step-by-Step Guide
  • Our Reviews
  • Contact Us

How Child Support and Alimony Payments Affect Mortgage Qualification

April 23, 2025 by Kay Monigold

When applying for a mortgage, lenders carefully assess your income and debt to determine your ability to repay the loan. If you receive or pay child support or alimony, these payments can significantly impact your mortgage qualification. Understanding how they factor into your debt-to-income (DTI) ratio, income calculation, and overall loan approval process can help you better prepare for home financing.

How Lenders View Child Support and Alimony

Lenders evaluate child support and alimony payments in two key ways:

  1. If You Receive Child Support or Alimony—These payments may be considered additional income, helping you qualify for a higher loan amount.
  2. If You Pay Child Support or Alimony—These obligations count as recurring debts and can reduce your borrowing power.

Receiving Child Support or Alimony as Income
If you receive child support or alimony, lenders may allow you to include it as qualifying income under certain conditions:

  • Consistency and History—Most lenders require proof that you have been receiving payments consistently for at least six months to a year.
  • Continuity—Payments must be expected to continue for at least three years after the mortgage closing.
  • Documentation—You will need to provide a divorce decree, court order, or legal agreement detailing the payment terms, along with bank statements or deposit records to verify consistent payments.
    When properly documented, child support and alimony can boost your income and improve your ability to qualify for a mortgage. However, if payments are inconsistent or set to end soon, lenders may not count them as reliable income.

Paying Child Support or Alimony as Debt
If you are required to make child support or alimony payments, lenders consider these obligations as part of your monthly debt when calculating your DTI ratio. This can affect your loan approval in several ways:

  • Higher DTI Ratio—Mortgage lenders typically look for a DTI ratio below 43%, though some programs allow higher ratios. If child support or alimony payments push your DTI too high, it may limit the loan amount you qualify for.
  • Reducing Borrowing Power—Since these payments are viewed as a recurring financial obligation, they lower the amount of mortgage debt you can take on.
  • Documentation Required—You must provide proof of your obligation, such as a divorce decree or legal agreement, along with payment history showing you have consistently met these financial responsibilities.

Ways to Improve Mortgage Qualification
If child support or alimony payments impact your mortgage qualification, consider these strategies:

  • Lower Your DTI—Pay down other debts, such as credit cards or auto loans, to offset the impact of support payments.
  • Increase Your Income—If possible, explore ways to boost your income through a side job, bonuses, or commission-based earnings.
  • Explore Loan Options—Some loan programs have more flexible DTI requirements, so working with a knowledgeable loan officer can help you find the best fit.

Child support and alimony payments play a significant role in mortgage qualification, whether you are receiving or paying them. Understanding how lenders view these payments and preparing the necessary documentation can improve your chances of approval. If you re unsure how these obligations affect your home loan, consult with a mortgage professional to explore your best options.

Filed Under: Mortgage Tips Tagged With: Child Support, Financial Planning, Mortgage Tips

Navigating Mortgages as a Self-Employed Professional

March 25, 2025 by Kay Monigold

Securing a mortgage as a self-employed professional can be more challenging than for traditional W-2 employees, but with the right preparation and documentation, it is entirely achievable. Here’s a guide to help you navigate the process:

  1. Document Your Income
    Lenders need to assess your financial stability and income consistency. To do this, you’ll need to provide:
    • Tax returns for the past two years
    • Profit and loss statements
    • Bank statements
    • Client invoices or contracts
    • Consistency is key, so showing steady or increasing income over time strengthens your application.
  2. Manage Your Tax Returns
    Many self-employed individuals minimize their taxable income through deductions, but this can reduce the income lenders consider when evaluating your mortgage application. It’s essential to strike a balance between tax savings and showing sufficient income for loan qualification.
  3. Boost Your Credit Score
    A strong credit score can offset some of the challenges associated with self-employment. Pay down debt, make timely payments, and avoid opening new lines of credit before applying for a mortgage.
  4. Increase Your Down Payment
    A larger down payment can make you a more attractive borrower. It reduces the lender’s risk and can help you secure better interest rates.
  5. Work with a Mortgage Professional
    Partnering with a mortgage originator who understands the unique needs of self-employed borrowers can make a significant difference. They can help you find lenders that specialize in working with non-traditional income streams.

While obtaining a mortgage as a self-employed professional may require additional effort, proper documentation, financial management, and the right guidance can help you achieve your homeownership goals.

Filed Under: Mortgage Tagged With: Financial Planning, Homeownership, Mortgage Tips

« Previous Page
Next Page »

Our Team

Kay MonigoldKay Monigold
Owner/Mortgage Broker/Residential Mortgage Loan Originator
NMLS#1086176

Steven LoweSteven P Lowe, Sr
Residential Mortgage Loan Originator
NMLS #1085638

GET A RATE QUOTE →

Connect with Us!

Browse Articles by Category

Accessibility Statement

We are committed to ensuring that its website is accessible to people with disabilities. All the pages on our website will meet W3C WAI’s Web Content Accessibility Guidelines 2.0, Level A conformance. Website Accessibility Policy

Equal Housing Lender


100 Independence Place, Ste. 308
Tyler, TX 75703
nmlsconsumeraccess.org

Quick Links

  • About
    • About Us
    • Texas Complaint/Recovery Fund Notice
  • Get a Rate Quote
  • Resources
    • Loan Process
  • Contact Us

Copyright © 2025 · Powered by MySMARTblog

Copyright © 2025 · Genesis Sample Theme on Genesis Framework · WordPress · Log in