Alimony and Child Support - if you are PAYING it

If I have to pay alimony and child support, will those debts be counted against me?

The short answer is also YES.  There are exceptions, however, as well as ways to lessen the impact it may have on your loan approval.

If the child support will continue for 10 months or less after closing, the debt does not need to be counted against the borrower.  This end-date is usually set forth in the divorce decree.  If the support ends upon a specific event (such as high school graduation) the lender could also require additional documentation.

For alimony, lenders have the option to reduce qualifying income by the amount of alimony obligation.  This will usually make for a dramatic improvement on the borrower’s debt-to-income ratio.