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Divorce creates challenges for financing a home

On Behalf of | Jul 31, 2017 | Divorce

The suburban Detroit home that a married couple shares often acts as a point of dispute or at least financial concern during the divorce process. Retaining ownership of a family home often represents a priority for a client, but financial realities might toss up barriers to that goal. Attorneys will often recommend that people consider fully the financial impact of keeping a home instead of making purely emotional decisions. Someone hoping to buy out an ex-spouse’s ownership in a home could face difficulty obtaining a new mortgage.

Lenders might not immediately view alimony as income. Some banks want six months of alimony payments on the record before using it to calculate eligibility for a home loan. A divorce could also lower the credit score of one or both of the former spouses. Stressful circumstances might prevent the timely payment of bills or one party might start ignoring obligations.

Ultimately, income matters most when a newly divorced person wants a loan. Many lenders will disregard pay from a part-time job as well as commissions and bonuses earned at a position unless the income has appeared on tax returns for two years. For some people, finding someone to co-sign a mortgage could overcome the problem.

People whose marriages are ending and who want information about how the law could determine the division of property could meet with Oakland County, Michigan, divorce attorneys. Michigan is an equitable distribution state, and courts will make these decisions on the basis of what they deem to be fair. It might be better to attempt to negotiate a division rather than to rely on a judge.