CALLING ALL MORTGAGE PROFESSIONALS...

[Anonymous]

Hi Everyone.  I recently learned through this forum that if my husband and I decide to apply for a mortgage in his name only that my debts will still be included in his DTI ratio because the state we reside in is a community property state (Washington).

So here's my concern/question:   My ex-husband and I still co-own a home in another state (Florida - which is NOT a community property state).  The language in our divorce decree clearly states that he is to have exclusive rights to live in the home but he also must pay ALL of the monthly mortgage debt (1st & 2nd mortgages, taxes, insurance, etc...)   It goes on to say that I am to be held "blameless" for such payments and expenses yet I am to still retain my 50% ownership interest.

My ex has been great about upholding his end of the bargain and has paid all of the payments ON TIME for the past 10 years.  The two mortgages have appeared on my credit reports the entire time along with the associated perfect payment history.

Will a lender recognize that I am not legally responsible for those debts (especially in light of the perfect payment history on my ex's part which clearly shows I have never had to make even a partial payment toward servicing that mortgage debt) and leave this out of my husband's DTI ratio? 

Or is this a case of wishful thinking on my part? 

[Anonymous]

Your lender should absolutely be able to present the true scenario to the underwriter so that they disclude that in your overall DTI. If nothing else I would think they could show his payments as a sort of "rental income" to you.

[ronq]

I don't think they can completely exclude them from your DTI because the loan is still in your name. Maybe they could use 80% of the mortgage payment as rental income, but I don't know. Shane/Dallas should field this one since they are the experts. You are still liable for the loan if anything should happen. The mortgage company will expect you to pay this loan if for some reason your ex doesn't so it is still a liability on your credit.

[GregB]

My soon-to-be-ex-wife bought a house last year. She is, of course, still on the deed and the mortgage of OUR house, which will be my house when the divorce is finished (5 years and counting....). There is no way she could have qualified to buy her house if she had any liability on OUR/MY house. I did have to show them proof that I have made all of the payments for the last 3 years including bank statements to show that she wasn't giving me any money to help with the payments.

It seems with a divorce decree you would be in an even better position since your ex is required to pay the payments. I think you will have some extra paperwork to do but won't have a problem.

[medicgrrl]

Yes, since the payment history is good then the lender should accept the divorce decree showing your ex is responsible for the payment.  Worst case scenario is that the UW would ask for cancelled checks to show he makes the payment, but that is unlikely

[Anonymous]

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@Anonymous wrote:

Your lender should absolutely be able to present the true scenario to the underwriter so that they disclude that in your overall DTI. If nothing else I would think they could show his payments as a sort of "rental income" to you.

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Hi Mank, thanks for the reply.  I like the point you make above, however, as I stated in my original post, we hope to qualify for the mortgage based solely on my husband's credit.  If the lender includes my income ( or rental income ) wouldn't they also have to include my assets, analyze my credit scores, etc....?  And if so, then we are back to BOTH being qualified for the loan - and this is exactly what we are trying to avoid.

To those who replied that my ex-husband might have to provide me with proof that he has been making the payments on the home we co-own, well, I'm hoping to avoid involving him in my life, and certainly my financial life.  We get along well but I'm thinking he might balk at being asked to provide copies of cancelled checks or bank statements.  I'm not sure I'd be comfortable with that if the roles were reversed. 

Dang, Washington state's community property laws!!  :-)

[Anonymous]

As you said, because you (and I!) live in the beautiful state of Washington, your DTI will also have to be included in the application, so there's no getting around that issue. The mortgage can still be in just your husband's name, which means your credit will not be taken into consideration. So, the only thing you have to get around is the debt on your ex husband's home which isn't really your debt but throws your DTI off. The divorce decree itself might be enough to show that you aren't responsible for the payments, and if not your ex husband can work directly with your lender to show the payments are being made by him alone, rather than handing over personal documents to you.

[DallasLoanGuy]

prove that he makes all of the payments ontime and you will be ok.

is that other loan an fha loan?

[Anonymous]

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DallasLoanGuy wrote:

prove that he makes all of the payments ontime and you will be ok.

Hi Dallas........Prove in what way?  Again, I'd rather not have to ask him for cancelled checks and/or copies of his bank statements.  Would a letter from the mortgage company stating all payments have been made timely for a period of X years suffice?  Or maybe a copy of my credit reports showing the mortgage is in both names and a perfect payment history? 

 is that other loan an fha loan?

No, it is a VA loan.

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