In the collaborative divorce process, one of the most crucial team members is the financial neutral. This impartial expert's primary role is to educate all participants, including the divorcing couple, their attorneys, and other divorce professionals, on the financial implications of divorce.
While Financial Advisors are typically known as financial neutrals in divorce cases, the need for specialized expertise becomes apparent when dealing with the marital home and mortgage planning.
Why a Certified Divorce Lending Professional (CDLP®) is Essential
When the marital estate's primary asset is the marital home or other real estate, having a Certified Divorce Lending Professional (CDLP®) as a financial neutral is highly beneficial.
In many divorce situations, negotiations often break down over financial issues, sometimes leading to litigation. A CDLP®, acting as a financial neutral, provides both parties with a balanced and thorough financial evaluation of the current mortgage and future mortgage financing requirements, offering realistic solutions to negotiation obstacles.
Key Roles of a CDLP® in Collaborative Divorce
Depending on the specifics of the divorce, a CDLP® can perform a variety of functions, such as:
- Facilitating the Collaborative Process: Offering solutions and understanding the needs for both spouses to obtain immediate and future mortgage financing.
- Guidance on Equity Buy-Outs: Providing insights on affordability and financing needs to support an Equity Buy-Out and refinance of the marital home.
- Support Income Analysis: Evaluating the ability of one spouse to meet mortgage financing guidelines using support income, such as maintenance and/or child support, as qualifying income.
- Debt Pay-Off Strategies: Analyzing debt pay-off situations to meet mortgage financing requirements and offering viable solutions.
- Documentation Assistance: Identifying and gathering necessary financial documentation to assist with mortgage financing needs.
In all scenarios, the CDLP® financial neutral focuses on assisting clients and attorneys in generating feasible mortgage financing options and understanding the future financial impact of those options. Financial neutrals must be adept at navigating various mortgage financing issues, be keen problem solvers, and offer realistic solutions to guide decision-making.
Benefits of Including a CDLP® in Your Divorce Team
A successful divorce settlement results from assembling the pieces of the puzzle in a way that ensures both divorcing spouses come out whole. Each member of the professional divorce team should contribute value and perspective that benefits the overall outcome and success.
Working with a CDLP® for Optimal Mortgage Planning
Partnering with a Certified Divorce Lending Professional (CDLP®) and incorporating Divorce Mortgage Planning into the divorce settlement can help both spouses secure new mortgage financing post-divorce.
Contact a CDLP® today for a copy of the Divorcing Your Mortgage Homeowner Workbook. This guide will help you get organized, be prepared, and understand your mortgage financing position, whether you need to refinance the marital home in an Equity Buy-Out situation or plan to sell and purchase a new home post-divorce.
Conclusion
As a divorce mortgage planner, the CDLP® can help divorcing homeowners make more informed decisions regarding their home equity solutions while assisting the professional divorce team in identifying any potential conflicts between the divorce settlement, home equity solutions, and real property issues.
What is Divorce Mortgage Planning?
Divorce Mortgage Planning is a holistic approach to evaluating mortgage options within the context of overall financial objectives related to divorce situations. Working directly with the divorce team, a CDLP® understands the intersection of divorce, tax, real estate, and mortgage financing. The role of the CDLP® is to integrate the selected mortgage into long and short-term financial and investment goals, minimizing taxes, interest expenses, and maximizing cash flow.
Involving a Certified Divorce Lending Professional (CDLP®) early in the divorce settlement process can help set the stage for successful mortgage financing in the future.
This is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact an attorney or tax professional to obtain legal and tax advice. Interest rates and fees are estimates provided for informational purposes only and are subject to market changes. This is not a commitment to lend. Rates change daily – call for current quotations. The information contained in this newsletter has been prepared by, or purchased from, an independent third party and is distributed for consumer education purposes.
Copyright 2022—All Rights Divorce Lending Association
