Home Buying 101: Relationships and Buying a Home in Florida
Whether you are married, separated, divorced, or “it’s complicated”, you may wonder how your relationship could affect your ability to buy a new home in Florida. With help from the mortgage specialists at Home Solution Lenders, Inc., we have answers to these frequently asked questions!
Can I buy a house with someone I’m not married to?
Absolutely! Buying a Florida home and being married have no correlation with one another; not to mention it is an Equal Credit Opportunity Act (ECOA) violation for mortgage lenders to discriminate in this way and it is against our Equal Housing Opportunity code of ethics. If you desire, you can buy a house with a family member, friend or significant other.
If you and your significant other are not married and looking to purchase a new home together, consider doing some financial planning together. Compare credit scores to ensure that both of you are on the right track to home ownership, put savings into a joint bank account and design a budget together. For legal reasons, it may also be a good idea to contact a real estate lawyer, put your home buying agreement in writing and decide how you will take title on the home.
We are legally married, what do we need to know about buying a home in Florida?
First off, if your wedding was a recent one, congratulations!! Buying your first home together is an exciting way to set a foundation for your marriage and start your life together. And, if you’ve been married 5, 10, or 50 years, congratulations on your enduring love and looking to purchase your first – or next – home in which to create wonderful memories.
One decision some married partners make is for only one party to hold the mortgage – and this is perfectly fine! This may be in your best interest, for example, if one partner has poor credit and would not be able to qualify for a mortgage, if your spouse is unemployed, or if he or she is self-employed and does not have two-years of business returns showing positive profit. When you pre-qualify for a mortgage, this is something your mortgage lender can help you decide on.
In the state of Florida, regardless of whether one or both married partners is on the mortgage loan, both parties need to be present at the closing to sign acknowledgements, and in some situations, lender specific documents.
What if I am separated or in the middle of a divorce?
Florida homestead rights dictates the spouse of the title-holder has rights to the property, regardless of whether both parties live at that property. Thus, it’s a little more challenging to purchase a home in Florida while separated or in the midst of a divorce – especially if your divorce papers aren’t finalized before closing on your home.
According to the Florida Constitution Article X Section 4, whether you are married, married but separated, or married but going through a divorce, it does not matter – until the divorce is final, your spouse must sign acknowledgements, as mentioned above, even if they are not on the loan and never intend to live on the property. This can raise a dilemma if one side decides not to sign. Usually, a divorce attorney will understand that your spouse will have no responsibility for the property and will not advise against signing these documents but if your spouse decides not to sign, your home contract could go into cancellation.
“Divorces cause a lot of issues from split bills, to debts accrued, to assets splits, alimony, child support, and etc.” – Ricky Peacock, President of Home Solution Lenders, Inc.
Going through a divorce while trying to purchase a home does indeed make things more difficult, but it is not impossible. To simplify your purchase, we do recommend finalizing divorce papers before applying for a mortgage loan or signing a purchase agreement.
Will receiving child support or alimony help my home loan approval?
If you’re receiving child support and looking for that income to be counted towards your mortgage qualifying debt to income ratios, most loan programs want to see that you have been receiving on-time, consistent support payments for at least 12 months. Late child support payments, although not in your control, can impact loan approval. You are also required to have at least 36 months of child support payments remaining from the closing date, based on your court-ordered child support documentation.
If you are collecting alimony, most loan programs will want to see that you have been receiving funds in a timely manner for at least 12 months, have at least 36 months of remaining alimony collection after the closing date, and file your alimony collection on your income tax returns and pay taxes on it.
For a more accurate measure of how your child support and alimony income will affect your home loan approval, we recommend discussing your specific situation with your mortgage lender.
Will paying child support or alimony affect my home loan approval?
The mortgage process heavily depends on your debt to income (DTI) ratio. As with any other reoccurring payments, child support and alimony are a debt and can affect your DTI. It is best to contact one of our preferred lenders for more information on your specific situation and to discover your home buying power.
Whether you are flying solo or looking to purchase a home with your honey, owning a home is a wonderful way to be empowered for your future, as well as appreciate the health, happiness and money-saving benefits of homeownership. At Highland Homes, we are here to help you accomplish your American dream through education, a network of preferred lenders dedicated to helping you find the best mortgage finance options and beautiful new homes designed for your life!
To start down your path to home ownership and get answers to your credit, mortgage and home buying questions, visit the Highland Homes website or call our Florida New Home Specialists today at 863-797-4999!
Please note, the information contained in this blog is provided as a courtesy and should not be solely relied upon for home buying advice or information. The information provided in this blog was accurate at the time of publication but has not been verified since. Please consult with your financial, tax, legal and/or real estate professional for more details.