Separated, spouse purchasing town home


We are separated for 14 months (no legal agreement).
My wife is purchasing a townhome, BofA has said the only hindrance to her getting the mortgage is the fact that she is on our home mortgage and it is hurting her ratios.
They said they will honor a free trader agreement to not count that in her ratios.
What is the best way to do that?

Is just a free trader agreement between us sufficient?
If we do a legal separation agreement, can we do it just for this or does it have to encompass everything, and what free trader verbiage should we use? Can/should it be back-dated?

Her mortgage officer did not seem real sure as to what is required.



The Free Trade agreement has nothing to do with her debt to income ratio and will only bar you from having a martial interest in the town home. In order to improve her ratios you will have to refinance the existing mortgage into a home loan in your sole and separate name, (and should have your ex sign over the home to you via Special Warranty Deed.)

The agreement cannot be back dated.


Thanks for the reply.

The bank has said that with the agreement and proof that I, and only I, have made the mortgage payment for a minimum of 12 months, they will not count the existing mortgage in her ratio calculation. I know, I questioned it at first, too, and both my wife and I asked them several times to verify this, and they did. Apparently, it is a bank policy and, in fact, it does not appear to be common knowledge in the bank because the first loan officer she talked to was unaware.



That is good news for you!


Yes, if I can figure out exactly what they are looking for!

Thanks. This is a great service you guys are doing!


You are welcome, I wish you the best.