Overdue child support and getting a home loan
Parents in Michigan who are delinquent in paying child support may find it difficult to obtain a loan to purchase a home. Delinquent child support is classified as a derogatory credit event and can lower the likelihood of getting approved for a loan. However, there are ways parents can address their overdue child support to get a loan.
It is important that a parent examine their credit report and carefully review all of the information that is provided. They should also determine if their FICO score is in line with the requirements set by the mortgage lender. If necessary, a home affordability calculator could be used to determine if they will be able to make the monthly mortgage payments while paying the overdue child support and any other current debts.
The manner in which the three primary credit reporting agencies report tax and civil liens changed in July 2017. This change also applied to how the judgments related to overdue child support are reported. Someone who owes delinquent child support payments may not see the negative record on their credit report, or it may not even affect their credit score.
A parent who is making payments on delinquent child support might not be automatically disqualified from a conventional loan if they have a credit score that is sufficiently high enough. When filling out their mortgage application, they are required to disclose their current support obligation in addition to the extra payments they have to make for overdue support.
Someone who has unresolved child support legal issues could discuss their legal options with a family law attorney. The lawyer may consider the factors of the case and work to obtain modifications to existing child support orders to accommodate the client’s change in financial circumstances.