Remember the "k-i-s-s-i-n-g" song from when you were a kid? "First comes love, then comes marriage, then comes a baby in a baby carriage."
In the old days, a mortgage usually came after the baby carriage. But fast-forward to modern times, and many couples are buying a house together before getting hitched. Changing the natural order of things could be a big mistake, warns Matt Parker, a Washington real estate agent who hangs his shingle with Keller Williams Puget Sound.
"While the numbers and studies are complex, the reality of a successful, mature partnership is not," says Parker, author of "Real Estate Smart: The New Home Buying Guide." "Make a firm decision on your relationship before you make a firm decision on your home."
Even co-habitating without a legal agreement is not a good idea, Parker writes. The numbers say that living with someone before marriage equates to lower marital satisfaction, more marital conflict, higher rates of infidelity and a higher likelihood of divorce.
"The relationship should come before your housing choice," Parker told me in an interview. "Getting out is far more difficult then getting in."
So fast-forward again, past the courting stage to the point where you're talking marriage. Admittedly, that comes much later these days than it used to -- so much later, in fact, that the prospective bride and groom may have created their own significant assets by that point. Perhaps a prenuptial agreement is in order.
Will that prenup impact your ability to obtain a mortgage?
Usually, the answer is no, says Karen Linehan-Wilson with 1st Advantage Mortgage in Lombard, Illinois. Generally, lenders do not ask about prenups. Barbara Sparks, with Envoy Mortgage in Houston, mostly concurs. Prenups "are acceptable," she told me, "as long as the agreement is court-ordered and complies with state laws."
Divorce is another thing entirely. The statistics aren't great. If there are children involved, buying a house after the split -- even long after the split -- becomes much more complicated.
When a would-be borrower has a divorce in his or her history, lenders want to see the marital settlement agreement, says Matt Weaver of Finance of America Mortgage in Boca Raton, Florida. Specifically, they are looking to see if the applicant pays or receives alimony or child support. As far as the underwriters are concerned, according to Weaver, there is no difference between alimony and support, even though support is usually tied to the age of the child/children.
If you have been receiving either type of payment continuously for three years and will continue to receive it for at least six months, says Weaver, you can count it as income. Of course, it must be verifiable, says Sparks. For child support, she says she confirms the children's ages to be certain the payments will continue for at least 36 more months.
If you pay alimony or child support, on the other hand, it counts against you in your debt-to-income calculation -- "in totality," says Weaver, no matter how much longer you have to pay.
Well, almost. If you have six months or less to go on your support payments, it's possible to make an exception. But otherwise, no.
"It's counted just like a car payment," says Weaver. "It's a liability that's no different than any other type of installment loan."
A copy of the divorce decree or court-ordered support payment is necessary to verify what you are paying or receiving. And if the terms of those documents have been modified, Sparks cautions, "a fully executed court order" is required to confirm the changes.
If your former spouse is paying inconsistently, you're going to run into trouble. If the lender cannot verify that you are receiving alimony or support payments regularly, month in and month out, you won't be given credit for it as income.
Another common problem with these kinds of payments is shared expenses: for example, jointly paying for the kids' braces. If your ex pays the orthodontist instead of you, it upsets the monthly verifiable trail of support payments. Here, Weaver says the important thing is to keep the trail intact: You get the money, and you pay the orthodontist.
One more possible challenge: If you want to buy another property while you are still in the throes of divorce, you should execute a "quit claims deed" to your current house and your soon-to-be former spouse should sign a release of liability.
If the split is less than amiable, good luck getting your ex to sign anything. Weaver calls that "a common cause of frustration" for the once-married borrowers he sees.
That's why he, like Parker, says not to rush into homeownership with your current love. Give it some time.