Buying Separately

How to get a mortgage
when you are separated



When you are separated from your spouse, legally or not, you are still technically married. This matters in California since it is a community property state. Legal separation generally occurs after the divorce papers are filed, but before the divorce is finalized. The divorce decree will show that the couple is separated, and it may provide instructions regarding financial matters, such as child support payments. It’s possible to obtain a mortgage when you are separated if you meet the lender’s criteria.

Check your credit report

…prior to applying for a mortgage loan to make sure the information is correct. You can check it for free at www.annualcreditreport.com, or one of the many websites that will allow you to pull your credit for a fee. If you had any type of account, loan or credit card open with your spouse (listed as a “J” or joint account on the report) activity on this account may affect your credit or credit score.  In the case of errors, contact the reporting bureau(s) immediately to have it removed or corrected.

Talk to a mortgage lender. 

Explain what you want and find out what is the required documentation. If after disclosing your income, credit score and debts, it sounds good to the lender, start the application process. You’ll need to provide proof of income, such as a pay stubs, W-2s and possibly tax returns. You will need to show 2 months bank statements showing enough for the down payment, or at least reserves (a financial cushion, just in case).  Finally, the lender will need to pull their own credit report to check your score and to be able to factor in your additional debts.  If qualifying for the mortgage is contingent on alimony or child support payments, the lender will want to see the divorce agreement, and proof that you have been receiving the support payments regularly and on time.


GOOD TO KNOW


• In California, as a community property state, FHA, VA and USDA loans have requirements that the debts of the non-borrowing spouse are added to your overall debts for qualifying purposes.

• In a community property state such as California, a non-borrowing spouse must sign a quit-claim deed releasing any interest in the property, even with a legal separation in place.