Common challenges
Alimony and child support count as income only with a court order and a history of receipt, and the marital home’s debt may still count against you until it is refinanced.
Programs that fit
Cash-Out Refinance
A cash-out refinance replaces your current mortgage with a larger one and pays you the difference in cash, commonly up to 80% of your home’s value on a primary residence.
Rate-and-Term Refinance
A rate-and-term refinance replaces your mortgage with a new one to change the rate, the term or the loan type, without taking cash out.
Conventional Loans
A conventional loan is a mortgage not insured by the government that follows Fannie Mae or Freddie Mac guidelines.
FHA Loans
An FHA loan is a government-insured mortgage that allows 3.5% down with a credit score of 580 or higher, or 10% down with a score from 500 to 579.
Tips before you apply
- Get the signed divorce decree or settlement before applying.
- Talk to your attorney before refinancing the marital home.
FAQ
What is the best mortgage for going through divorce?
It depends on your documentation and goal. The programs that most often fit are Cash-Out Refinance, Rate-and-Term Refinance, Conventional Loans, FHA Loans.