What are my chances of getting a new mortgage if my ex spouse is late on joint mortgage? This is one of those situations where many ex spouses frequently find themselves in (i.e. The divorce decree states that an ex spouse is responsible for a joint mortgage. The ex spouse then fails to pay, refinance or sell the home).  The joint mortgage therefore, still remains on both names and is being reported on both credit reports.

Under those circumstances, you may still qualify for a mortgage.  However, this will depend on the number of late payments and the damage done to your credit score along with your overall credit profile.  Fannie Mae guidelines considers this type of debt a contingent liability and lenders don’t have to count this payment in your debt to income ratio(DTI).  Nevertheless,  this is certainly up to the lender.

For those lenders that will underwrite your file, your loan will definitely involve a manual underwrite, which means a strict underwriting DTI ratio of 31/43.  Also, be prepared to document every aspect of your loan. The lender will ask for a detailed letter of explanation along with copies of your divorce decree and a 12 month payment history on all mortgages prior to the divorce being finalized.

To sum it up, you have a good chance of getting a mortgage if your overall credit profile is strong and you can document your circumstances. Make sure to discuss your situation upfront with the Loan Officer since it is contingent on the lender.