getting a mortgage based on alimony payments.

[mopinko]

so, my settlement is looking like i cant do a lump sum settlement.
i am hoping to keep the property we have, tho there are mortgages on our home, and another property. that piece is heavily mortgaged.
i will need to refi that.

i have been a full time mom all these years. is there applicable law about my credit? most bills are in his name, tho the utilities have always been in my name.
is it possible for me to just assume these mortgages?
if i cant get an interest rate that is close to what we have now, i will be screwn.

any advice?

[elleng]

1. Sorry.I.have.no.answer.

X-post.in.Personal.Finance+Investing?

Mortgage.rates.today
http://www.mortgagenewsdaily.com/mortgage_rates/

[SheilaT]

2. If you are getting a mortgage on your own,

you'll need to go through the same income verification as anyone else. If you have alimony payments, you'll need a copy of the court order which states the amount of the monthly payment.

I bought my current home five years ago after my divorce, and that's exactly what I had to do.

But you need to think long and hard about whether or not it makes financial sense to keep these properties. Can you really afford the payments? Can either one provide rental income?

I don't know for sure about your specific credit record. If you had credit cards in your own name, that will help, because you'll have your own payment history. Utilities in your name means you do have a payment history. It may be possible for him to sign a quit-claim deed to the properties, after which they'd be re-titled in your name, and you might be able to simply assume payments. However, the mortgage company may have other opinions and regulations about what they are willing to do.

I am under the impression that a wife's credit is considered separate from her husband's, unlike what it was through about the 1970's, when a woman tended to lose all individual identity of any kind upon marriage. But if you fell off the radar when you got married, it may be more difficult.

Oh, and the other thing about depending on alimony is this: Will he actually pay it regularly? Is he working? What's the chance that he might appeal to the court to reduce his payments? That happened to me, when about a year after our divorce my alimony was cut by two-thirds. I was actually in the process of buying the home I currently live in at the time. Luckily for me I was working and I had other assets that meant I could cover the mortgage, even with that reduced alimony.

[mopinko]

3. we are still in negotiation, but

i will insist on a direct deposit from his check or bank account.
he is working, and very well paid. soon to get better paid, i am sure. i have no doubt his next review will bring him a big pity bump.
my only worry is that he is drinking. he has been a high functioning (at work) borderline.
but i think he will take to some "rebellious drinking", stopping for shots with the guys after work because he can.
he is too high up to do anything but fail up, i think. but.....

but yes, the big mortgage is on a 2 flat. all the properties together make up my farm. i need them to stay together.
the other is the family home. a big ole thing that i would likely be smart to sell. but the mortgage on it is small. i have one roommate now, and will likely get a couple more after things shake out.

it is my heart, tho. i have put a llllooottt of myself into it. it is a one of a kind.
and its in pretty good shape. utilities are pretty reasonable. taxes are not that bad here in cook county.

[SheilaT]

4. I realize I'm going out on a limb here,

but being able to count on money from him so as to pay the big mortgage, just sounds incredibly risky to me. Are you working? Can you make the mortgage payments without the alimony? Can the property be refinanced at a significantly lower interest rate?

Is the farm the way you expect to make your living? Is that actually realistic?

I'm asking all these questions because it just feels so shaky to me. I understand how hard it would be to give up something you care so much about, but you must be totally realistic about this.

And since he has gone back to drinking, it just feels as if everything could come apart quite easily. A direct deposit is just fine so long as he keeps on working and the money is there. But if he loses this job, if his drinking gets out of control, you could be left without that income. I'm honestly worried about your situation.

[mopinko]

6. it is shaky. no i dont work.

first of all, i am 60 yo, havent held a job in 30 yrs.
i also have enough chronic health problems that i can hold a regular job. i do do some freelance graphic design, but not that much.
i could likely get a campaign job, but i dont have the stamina to do it right.

yeah, i am honestly worried about my situation, too.
re drinking, just want to say that at no point did he have a "drinking problem". borderline but high functioning. been at the same job 25 years. climbed the ladder.

the farm (really, pocket farm. a big city lot, plus some space at home) was about an active retirement more than a second career. it will bring in some money in a couple more years. but it is more about never wanting for good food no matter what than it is about income.
of course, the property is worth way more than we got it for, especially since we also bought the 2 flat adjacent to it.
that is where the mortgage worry comes. there is little equity in it. right now it clears a profit when rented. with a higher rate, it's more iffy.

also, there is a 401k that i can tap, theoretically, i could take that and say bye bye.
but the farm needs the 2flat. it needs the water, electric, basement space, and legally, to put a building on the farm, i need the residence.
it needs a building. a little barn.

[SheilaT]

7. If you simply hadn't worked for thirty years,

even though you are sixty, I'd point out that you could still get a job. It would be something entry level, but it would at least be money coming in. I went back to work at age sixty after a divorce, and it's honestly not hard to get entry level work. But the chronic health problems rule that out, unless you can occasionally do temp work of some kind, but I'm going to assume you can't.

You will be able to collect SS at some point, against his account. The current rules are that as a divorced spouse you can collect half of what his full amount would be. If he dies before you, you become his widow (even if he's remarried) and then collect his full amount. Here's a link to the SS page about that http://www.ssa.gov/dibplan/dfamily3.htm

If you live near a Social Security office you might also want to go in and discuss this with them. Please do plan all this very carefully, and don't put yourself into a place where if he stops paying your alimony you can no longer make the payments on the land or the house and get foreclosed. You'd be much, much better off to sell in the first place and put that money somewhere else.

One small thing. I'm slightly confused about the 2flat you talk about. Is that a duplex?

[mopinko]

8. in some places they do call them duplexes.

it does show a profit when rented. its the in-betweens that worry me. think i will be good for a couple years, tho. 1st floor has a good tenant just re-upping now. youngest daughter lives on the 2nd floor, at a reduced rent. that one will be tricky, but will work something out.
it is kinda good that there is very little equity in it, as that is what is actually being awarded.

i have also asked that he continue to keep me as the beneficiary of his life insurance, which is considerable.

the family home has only a small equity line, which i think i will pay off if i can after the settlement. it is also integral to the farm. the place has too much of me in it for me to sell. i did so many projects here, tile mosaics, and a half done mural. i have a handicapped accessible bathroom. a great kitchen.

i can rent out rooms, and bring in some money that way, and even get some cheap farm labor out of the deal.
i am aware that keeping the big ole house is often a mistake. but this is not that great a time to sell, anyway. it needs a lot of things finished to really bring the full value. before the bubble burst is was worth twice what it is now. prices are starting to go back up.
i hope to get it all spit and polished at any rate, which will take some time.

and like i said, if i had the stamina, i could easily be somebody's campaign manager, or at least an area manager. i hope to have so gd work in the upcoming muni elections. have done some work for one candidate, and that manager is also running something else now.

i wont starve, and i doubt i will lose the house. if he wanted to dump the assets we have and run, i would end up with about the same amount of income.

i read up about ss, and i think i will file on my own earnings, tho paltry, at 62. i can then claim full spousal benefits at 65 without penalty.
also asking for medical insurance till i hit 65. thank ja that obamacare means this is not a terrifying situation on that front. if i have to insure myself i think i will still survive.

it's just the uncertainty of it all. i have been in this holding pattern since feb. even knowing that i will likely be fine, it is still unnerving.

one thing i do know, tho. the judge is going to be more generous to me than he ever was or would be.

[laundry_queen]

5. I was unable to get anything under my name

Now, I am in Canada so rules might be different, and my credit had been damaged by the whole divorce (I was a stay at home mom and relied on my husband to pay my credit card bills, as well as the mortgage/car payment and one day he decided to stop without telling me, I found out later when they cancelled my card and repo'ed my car. Fun times) but I was unable to get even a secured credit card with my legal papers stating my income (At the time I had child support and alimony totalling $4000/month). They didn't see it as income, even though legally it was. It was so dumb - I could've stayed in my marital home (we caught up on the mortgage payments) but I wasn't allowed a new home with lower payments.

When I eventually bought my own house a few years later, my parents (who have impeccable credit and no debt at all) had to co-sign. I recently did an inquiry to see if it would be possible to get my parents' name off my mortgage - I now have a job and have a bit more income (gave up the alimony, still get child support and have a steady salary)- and the answer was no. I would not be approved, even with a job. However, my house is quite expensive (high cost area) and my salary pretty low so that could be why, as my credit is very nearly completely repaired.

Good luck. Dealing with finances through a divorce just plain stinks.