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Child support in mortgage underwriting?
It's my understanding that mortgage underwriting considers child support payments to be like consumer debt. They are added to any other monthly payments you may have along with the proposed new mortgage payments and divided into your monthly income to get a debt to income ratio. This ratio must be 41% to 47% to qualify for a normal mortgage, depending on the loan program.
I am suprised to see the full amount of child support included as a debt, since the single or married parents of children who neither pay nor receive child support would be allowed a much larger loan, yet face 100% of the costs of raising the children. Do I understand this correctly, and is there any recourse for what appears to be an unfair business practice? It seems to me that some if not all of the support would simply be considered the same expenses that any family with children face, alongside the mortgage and any other loans they may have. I assume the fact that it's harder to adjust support downward when you have a financiall setback contributes to this issue, but why include the entire amount?
3 Answers
- golferwhoworksLv 71 decade agoFavorite Answer
what is included is your monthly amounts owed as a noncustodial parent. The divorce agreement states what you must pay. So this is where the information comes from. It is a crime not to sy that you do not owe it when it is part of the federal declarations that you must sign as part of the whole application.
I am a mortgage banker in TN & KY
- Anonymous1 decade ago
I've bought 3 houses in the last 3 yrs - 2 as investment properties and I think I had to include my ch Supp payments (to my ex) as debt payments
- ?Lv 45 years ago
hi Jo if its courtroom order its often on your credit record you may ask your lender to check your record to make constructive. maximum lenders whilst taking an app will ask you in case you pay spousal help or new child help. you may nicely be disqualified in the event that they locate out later and you debt develop via plenty often the investment banks do no longer choose to verify that. Its called a decrease back end ratio its the comprehensive debt alongside with your new housing charge with goverment classes alongside with FHA can not be extra the 40 5% of the comprehensive income as long as your under which you will desire to be superb.
