Short answer
Alimony you pay is generally treated as a monthly obligation. Depending on the loan program, it may be added to your debts or deducted from your qualifying income — either way it reduces the amount you can borrow.
Two ways it can be applied
Some programs add the payment to your monthly liabilities, increasing your debt-to-income ratio. Others reduce your gross qualifying income by the payment amount. The second treatment is often more favorable, but availability depends on the program.
This is one of the clearest examples of why a mortgage feasibility review should happen before the support amount is finalized.
Structure affects outcome
The size and duration of support, and how it is described in the agreement, can change what your future housing budget looks like. Understanding that trade-off before signing gives everyone better information.
Frequently asked
Does a shorter alimony term help me qualify?
It can, depending on the program and how much time remains. Some programs allow obligations with limited remaining months to be excluded; requirements vary.
About the author
Abdel Khawatmi, CDLP®
Certified Divorce Lending Professional and founder of Got Mortgages, a division of Paramount Residential Mortgage Group, Inc. Abdel works with divorcing homeowners, attorneys, mediators, financial professionals and real estate professionals across New Jersey. NMLS #1712023. He is not an attorney, tax advisor or financial advisor, and this article is educational only.