Posted on: 11th Dec, 2009 08:37 pm
I have a client who is going through a divorce and after the divorce will be refinancing the house.
1.) The ex-spouse will be making monthly alimony payments of $2,000.00, which will total $24,000.00 per year
2.) The wife will stay in the home and make payments on the mortgage and she works full time.
I need to know the following:
1) With the new changes to the Debt to Income percentage, what is the max front end percent she should be at and what is the max back end percent?
I am confused as to the new maximum of the total debt to income ratio being set to 45%.
Could someone tell me what the actual maximums are for the front end and the back end and where this 45% comes into play?
Also, how does she get his name off of the house?
Thank you.
1.) The ex-spouse will be making monthly alimony payments of $2,000.00, which will total $24,000.00 per year
2.) The wife will stay in the home and make payments on the mortgage and she works full time.
I need to know the following:
1) With the new changes to the Debt to Income percentage, what is the max front end percent she should be at and what is the max back end percent?
I am confused as to the new maximum of the total debt to income ratio being set to 45%.
Could someone tell me what the actual maximums are for the front end and the back end and where this 45% comes into play?
Also, how does she get his name off of the house?
Thank you.
The answer to that question requires a bit more information than what you provided. Let me break it down into pieces and see if that helps to work out the deal.
First, to remove the husband from the house, you may use a divorce decree explaining that the home has been given to the wife in the divorce. That is most likely the best route to go since the vesting of the property will change from "a married woman", to "an unmarried woman as her sole and spearate property."
Second, whether it is alimonry or child support that you will be receiving, they will need three years verification of continuance. So, if part of those funds received are due to support of a child as well, that child will need to 14 and under.
The debt to income will vary on the type of loan they are able to finance into. For instance, if she is being put into a new conforming loan, it is possible that her debt to income will be 45 or 50%. It really is going to depend on the type of loan program the wife has to choose from. In some instances, I have been able to get FHA Loans approved through the automated underwriting system with ratios upwards of 56%.
If you are handling the financing of this home for the client, the best bet would be to gather all income and debt information, along with the complete 1003, and run an automated approval on the wife to see if she is able to qualify. Even though the restrictions for lending have become more stringent, the debt to income can still be used as a tool for compensating factors.
Good luck.
First, to remove the husband from the house, you may use a divorce decree explaining that the home has been given to the wife in the divorce. That is most likely the best route to go since the vesting of the property will change from "a married woman", to "an unmarried woman as her sole and spearate property."
Second, whether it is alimonry or child support that you will be receiving, they will need three years verification of continuance. So, if part of those funds received are due to support of a child as well, that child will need to 14 and under.
The debt to income will vary on the type of loan they are able to finance into. For instance, if she is being put into a new conforming loan, it is possible that her debt to income will be 45 or 50%. It really is going to depend on the type of loan program the wife has to choose from. In some instances, I have been able to get FHA Loans approved through the automated underwriting system with ratios upwards of 56%.
If you are handling the financing of this home for the client, the best bet would be to gather all income and debt information, along with the complete 1003, and run an automated approval on the wife to see if she is able to qualify. Even though the restrictions for lending have become more stringent, the debt to income can still be used as a tool for compensating factors.
Good luck.