A divorce decree may award the marital home to one spouse, but the mortgage is a separate contract. Both borrowers stay legally on the mortgage until one of the following happens:

• Refinance. The retaining spouse refinances the loan into their own name only. This is the cleanest, most common path.
• Sale. The home is sold, proceeds are split per the decree, and both borrowers are released.
• Assumption. The retaining spouse assumes the existing loan. This is rare on conventional loans but available on FHA, VA, and USDA loans, subject to lender approval and the assuming borrower re-qualifying on their own.

A quitclaim deed alone is not enough. The quitclaim transfers title interest in the property but does not remove anyone from the mortgage note. If your ex defaults after a quitclaim, the lender can still pursue you.

When alimony or child support is paid to you, it can usually be counted as qualifying income if all of the following are true:

• 3 to 6 months of documented receipt at the amount stated in the decree (program minimums vary; we work with lenders going to the most permissive history requirement where allowed).
• At least 3 more years of expected continuance.
• Documented by the signed divorce decree, court order, or signed separation agreement.
• Receipt evidence in the form of bank deposits, cancelled checks, or state-disbursement records.

When you pay alimony or child support, it is a monthly debt obligation on your DTI. The court order or decree is the source document. Some loan programs allow alimony to be subtracted from gross income instead of added to liabilities (a treatment that often helps DTI). Child support is always treated as a liability.

Under IRS Section 121, the capital gains exclusion on a primary residence sale is up to $250,000 for single filers and up to $500,000 for married filing jointly, assuming the ownership and use tests are met.

Timing of the sale relative to the divorce affects the tax treatment. Selling before the final decree, while still married filing jointly, can preserve the $500,000 exclusion. Selling shortly after the divorce can sometimes still qualify for the joint exclusion if both ex-spouses meet the ownership and use tests for the home.

Not tax or legal advice. Consult a CPA and a divorce attorney for your specific situation.

Lenders typically require a signed decree or separation agreement before accepting alimony or support as qualifying income. Until then, those amounts are not counted.

You can sometimes buy in your name only mid-divorce if:

• Your own income qualifies you for the new loan.
• The new property will not be considered marital property under your state law.
• You can document the source of the down payment as your separate (non-marital) funds.

State law matters. Community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin) generally treat property acquired during marriage as jointly owned unless an exception applies. Equitable distribution states leave more flexibility but still have rules.