I pay my ex’s mortgage to protect my kids. Will lenders count that against me?

Since Amy runs a couple of side hustles, she doesn’t have what lenders consider a fully verifiable income. So Tom agreed to keep paying the mortgage — under his name — and Amy would pay him back as soon as she got paid with her side-hustle earnings.

They’ve never had any issues with this arrangement. But now Tom is thinking about buying a condo, and he’s worried he’ll have trouble getting a second mortgage — even though Amy reimburses him for the mortgage payments on the family home.

Challenges of getting a second mortgage after divorce

These types of situations are becoming more common, especially among divorced or separated parents trying to prioritize stability for their kids. But lenders don’t assess mortgages based on family dynamics.

And misunderstanding how this works could lead to loan denials, lower borrowing limits or higher rates.

If you have a joint mortgage, you’re both responsible for it — even after divorce. Some couples choose to sell the house and split the proceeds, refinance the mortgage in one spouse’s name or have one spouse buy out the other.

Keep in mind, a mortgage isn’t the same as a deed (a document that proves you hold title to a property). So, you can hold title without being on the mortgage (and vice versa).

Some divorcing couples choose to keep the mortgage as is. In Tom’s case, he’s responsible for the loan from a legal standpoint, which could impact his ability to get a second mortgage.

According to The Mortgage Reports, a borrower’s debt-to-income ratio (DTI) plays a critical role when qualifying for a new mortgage. If a person is listed on another mortgage, that obligation is included in their DTI calculation and can impact their ability to qualify — even if they are not the one making the payments on the existing loan (1).

Your DTI is calculated by tallying up all of your debts, including your mortgage, car loan and credit cards, and then dividing it by your gross income.

The higher your DTI ratio, the harder it could be to qualify for a mortgage. Lenders typically want to see a DTI of 36% or less, though some may allow for a DTI in the 45% range. In Tom’s case, his DTI looks higher than it is, since his name is on a mortgage that his ex-wife is reimbursing him for.

Keep in mind that if you pay child support — as Tom does — that will also count against your DTI in the same way as a car loan or credit card debt.

According to Mortgage One, this reduces the amount you may qualify to borrow. If you apply for a mortgage jointly with a new spouse or partner, your support obligations could also affect their qualification, depending on how the application is structured (2).

How both partners can move on

When applying for a second mortgage, having a divorce decree that states your ex is responsible for the first mortgage can help your case — along with proof of payment, such as bank statements showing that your ex has paid you back each month.

But it’s still no guarantee, and lenders may still view you as legally liable. You’ll be evaluated by lenders based on one income instead of two, which could lower your borrowing power. You could also be charged a higher mortgage rate.