If you are Veteran who is RECEIVING Child Support there are some important points to consider when applying for a mortgage loan. A VA Loan requires that income used to qualify you for a home in NC include income that is “stable, reliable, and likely to continue.” Unfortunately, for some Veterans, this can be kinda sticky when it comes to their Child Support payments. Child Support and qualifying for a VA Loan is pretty easy, if the payments are being made on time!
For Child Support payments to count towards qualifying for a VA Loan, it needs to have been received for at least 12 months. So, if you just got separated you’ll need to wait until you’ve received payments for 12 months before we can count that income. If you don’t need this income to qualify VA loan underwriting requirements don’t force the borrower to list such payments as income.
Why wouldn’t someone list it as income? Well, we have to verify that the payments have been received consistently and on time. If you receive this income sporadically, or we can’t DOCUMENT the income – it won’t be counted.
In most cases you’ll need a court order or other official documents showing the payments are required. A parent who is contributing to the Child’s Support without the Court ordering it probably won’t count. This type of Child support and alimony can’t be counted as income as part of informal agreements or a “verbal contract”. (More information on Single Parents Qualifying for a home in NC)
In addition to being court ordered, you need to have evidence that you will continue receiving the support for at least 36 more months (after closing). Many of the NC Divorce and Separation documents we see from Veterans include language that says, “Once the minor child reaches the age of 18” and then says something about they are going to pay support IF the child goes to college. Because this is not a guaranteed situation, they are not going to count the child support income from a 16 year old child who may go to school… even if you provide us with documentation that they are “brilliant.”
While we are talking about what income is used, remember that only verifiable income may be included to qualify you for a mortgage. Things that the VA Loan underwriter won’t consider include: spouse income from eBay sales, hobbies, piano lessons or other jobs that are not recorded as income for 2 years on your tax return. These income sources don’t meet the VA definition of “stable, reliable, and likely to continue” may not be included.
If you have questions about purchasing a home and qualifying for a VA loan in NC – please call Steve and Eleanor Thorne! 919-649-5058. We offer the best VA Loan Programs available at the Best Rates in Raleigh! We also work with the TOP Real Estate professionals in NC, and would be glad to refer you to someone who knows how to structure a contract with the Seller Paying Closing Costs!