How can Child Support payments effect buying a home?
Photo Courtesy: Paul Lopez
While planning and preparing our Families Father's Day Festivities, I pondered about some of my recent experiences involving clients that have asked me how can child support payments effect buying a home? In the interest of full disclosure, I'm not an Attorney, or a Mortgage Lender. This blog is written to share experiences, to bring awareness to potential home buyers that are not sure if, or how can child support payments effect buying a home. Conversely, this blog is not intended to portray an opinion on the child support system, absent parents, etc. The names of the story have been changed to protect the privacy of all parties involved.
Fred Flinstone contacted me to find out how he could go about selling his Long Beach home. I requested that he send me mortgage statements, as I ran a preliminary title report and started pulling comparable in the neighborhood. I called Mr. Flintstone to inform him that there appeared to be a child support lien on his property in the amount of over $20,000. After Mr. Flinstone calmed down...he informed me that he had an adult child, in another state that he had paid court ordered support. I immediately suggested that Mr. Flintstone consult his attorney, we learned that the lien would be paid off at the time Mr. Flintstone sold or refinanced his Long Beach home. Although Mr. Flintstone wanted to sell his home, he does not have enough equity to offset fees and closing costs associated with selling his Long Beach home (due to the child support lien being placed on the property).
Natasha Fatale is an enthusiastic home buyer, who unfortunately went thru a divorce and was ordered to pay child support to her astrained husband. Natasha wanted to know how can child support payments effect buying a home. Natasha has a court order to pay support, but makes payments directly to her ex-husband, and is not under a garnishment order. Natasha's lender reported that the child support payment did not have to count towards her debt to income ratio because it was not a garnishment, or otherwise documented on her paycheck stubs, etc. The mortgage lender added that if the child support payments are documented via garnishment, tax documents or payroll records it could negatively impact the buyers debt ratio, and therefore how much home the prospective buyer can afford. Last but not least, had Natasha been in the "arrears", some lenders, depending upon the type of loan may require that you pay off the arrears before you are able to purchase a home.
This is food for thought, if you are wondering how can or does child support effect buying a home. Please call me if you are interested in selling your home or buying a home!
Click here for information on the LA County Child Support Compromise of Arrears Program.
Click here for a non profit organization that helps fathers with child support issues.
Click here to look for available homes in the Long Beach area (feel free to modify search criteria as appropriate).
Click here to search for Family Law attorneys (this is no way implies an endorsement)