Question by Just BN Me: What is acceptable to prove you are not responsible for a real estate property payment?
I recently divorced. Me and My ex were both on the mortgage of our house. He now has the house but due to the houseing market slum he was not able to refinance the house out of my name. The divorce papers specifically say he is responsible. He is making the payments but of course the debt still shows up on my credit.
I want to buy again but what is acceptable documentation to give to the lenders to prove I am not making the house payments on that house and will they still count the debt in my DTI?
Someone said I could print out my ex’s bank statements showing that he’s making the payments and not me. I just wasn’t sure if this was sufficient.
I’ll definitely look into the rapid-rescore.
Answer by Landlord
You have to force the ex to either sell or refinance. There is absolutely no other way to get you off of the mortgage.
The loan people could not care less about your divorce papers, the loan docs are the ones that matter here.
You can sue the ex for contempt of court for failing to remove your name.
Know better? Leave your own answer in the comments!
Unfortunately, there is not much that you can do about this other than try to get off of the joint home loan. You are correct that the new bank will be interested in how much of your income goes to home payments and other debt. So you should explain this settlement to them. However, they are equally concerned with how many entities there are that could file a judgment against you for losses thus affecting their loan. Should your husband fall behind on mortgage payments, a judgment filed by a bank will affect you and therefore your new creditors.
I would ask an Attorney. The Bank may accept the divorce decree to show you are not responsible to pay, however because you are on the mortgage they will probably hold you responsible also if the mortgage is not payed. An attorney would be better able to assist you.
I honestly believe your future Lender will respond to the divorce decree as proof that you are not financially responsible for the husbands mortgage.
Obviously, any future purchases would be so much easier and smoother if the previous mortgage wasn’t on there. So perhaps you should try to “rapid re-score” that mortgage off your credit. Contact your loan officer and request that he attempt to have his credit agencies do a “rapid re-score” to take the mortgage off credit. They’ll need to see the divorce decree, AND they’ll need to verify it’s accuracy. If you include your Lawyer’s explanation letter and phone number it may help the situation.
Now, when the mortgage is “re-scored” off the credit, your fico can and will change, sometimes to the downside. Depending on what other types of strong credit you have, it may be worth leaving the mortgage on there if it has years of on-time payments.
Another option is inform the lender that you are renting the home out, in which case the rental income will help off-set the mortgage payments, which will keep your dti more under control.
There are many options here, so contact a good Loan officer and you should be fine (If your credit/income is good.)