Benjamin Franklin once said, “If you fail to plan, you plan to fail.” Success requires deliberate planning and knowing your goals and how to achieve them. This principle is especially relevant in divorce settlements involving real property and mortgage financing.

Why Divorce Mortgage Planning is Essential

A successful divorce settlement results from strategically assembling all the pieces so both parties can move forward positively. When real property and mortgage financing are involved, prioritizing divorce mortgage planning is crucial. Various factors related to the property can significantly impact the marital balance sheet and the type of mortgage financing available to the retaining spouse.

Key Aspects to Consider:

  1. Title Details: Who is on the title and for how long?
  2. Mortgage History: What was the purpose and timing of the most recent mortgage financing transaction?
  3. Property Valuation: What is the property's current value, and how was it determined?

Financial Planning Considerations

Several financial planning aspects of the divorce settlement can also influence future mortgage financing:

  • Capital Gains Taxes: Mitigating taxes by keeping both spouses on the property title.
  • Income Distribution: The impact of lump-sum payouts versus monthly support payments.
  • Debt Division: How joint marital debt is divided and paid.

Failing to incorporate divorce mortgage planning into the settlement process can jeopardize either spouse’s ability to secure future mortgage financing, whether refinancing the existing mortgage or purchasing new homes.

The Role of a Certified Divorce Lending Professional (CDLP®)

Divorce Mortgage Planning is a comprehensive approach to evaluating mortgage options within the broader context of financial objectives related to divorce. As a Certified Divorce Lending Professional (CDLP®), the role involves identifying potential conflicts between the divorce settlement, financial planning, home equity solutions, and real property issues.

Benefits of Working with a CDLP®

  • Integrated Financial Goals: Helping integrate the selected mortgage into the long and short-term financial and investment goals.
  • Tax and Interest Minimization: Strategies to minimize taxes and interest expenses while maximizing cash flow.
  • Informed Decisions: Assisting divorcing homeowners in making informed decisions about their home equity and mortgage financing options during and after divorce.

Incorporating divorce mortgage planning into the settlement process simplifies identifying possible solutions and helps both parties release counterproductive positions and emotions. A CDLP® can assist in evaluating possibilities, resources, and answers regarding the marital home, other real property, and mortgage financing opportunities.

Achieving a Successful Divorce Settlement

A successful divorce settlement hinges on effective communication and strategic negotiations, ensuring both parties emerge whole or on the path to recovery. By working as a team and incorporating divorce mortgage planning with a Certified Divorce Lending Professional, you can achieve better solutions and outcomes for the divorcing couple.

Early Involvement is Crucial

Engaging a Certified Divorce Lending Professional (CDLP®) early in the divorce settlement process can set the stage for successful mortgage financing in the future.

Contact a CDLP® today for a copy of the Divorcing Your Mortgage Homeowner Workbook, a guide to credit, real estate, and mortgage financing after divorce. This workbook 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 prepare to sell and purchase a new home post-divorce.

Copyright 2021—All Rights Divorce Lending Association

 

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