Your perspective is how you see something regarding situations or topics, the appearance of things relative to one another.
Multiple perspectives are crucial to gain a complete understanding of a situation. For example, in divorce, different views on different topics can affect the divorcing spouses in different ways—either positively or negatively.
Take the following questions, for example:
- How would you calculate spousal support when the paying spouse has fluctuating income or an irregular pay schedule?
- How would you handle spousal support vs. a lump sum payout?
- How do you evaluate the home equity, the home equity solutions, and the options available?
Your perspective or solution to these questions may satisfy the parties during the settlement process; however, the answer may negatively affect either party when obtaining mortgage financing.
Collaborating with the right team players results in different perspectives and better solutions!
Make More Informed Decisions on Home Equity Solutions
There are three ways to divide the marital home: equity buy-out, selling the home and dividing the net proceeds, or holding the property and selling later.
A marital settlement agreement may state that one party retains the marital home and refinance the existing mortgage. Still, a court cannot dictate which type of mortgage financing is available, if at all.
Home equity solutions reach beyond the disposition of real property.
Incorporating divorce mortgage planning into the settlement process results in a more positive outcome for both spouses and their families.
Divorce mortgage planning is the process of evaluating mortgage options in the context of the overall financial objectives of the divorcing couple.
- Improving cash flow and retirement income.
- Identifying strategic financing opportunities.
- Mitigating potential capital gains taxes.
- Protecting the mortgage interest deduction.
- Increasing qualified income through collaboration.
What's my property worth?
Even determining the value of a real property depends on perspective.
The two most common methods for obtaining real property value are obtaining an appraisal from a licensed appraiser or having a real estate professional provide a CMA— but what’s the difference between the two? Both methods are an opinion of value, and no two will ever give you the same value. The primary difference is perspective.
- An appraisal is completed by a licensed residential appraiser who bases their opinion of value on recent comparable home sold sales data.
- A Comparative Market Analysis (CMA) is completed by a licensed real estate professional who bases their opinion of value on what the property may potentially sell for in the current real estate market.
While both opinions of value are valid, it is crucial to understand the perspective of each opinion and how the two methods apply to the current situation of the marital home. When considering the option of one spouse retaining the marital home and refinancing, an appraisal may be the better option. If considering a sale of the marital home, a CMA may be a better option.
A successful divorce settlement results from putting the pieces of the puzzle together in such a manner that both divorcing spouses come out of the divorce whole. Therefore, each member of the professional divorce team should bring value and perspective that benefits the overall outcome and success.
As a divorce mortgage planner, the CDLP® can help divorcing homeowners make a more informed decision regarding their home equity solutions while helping the professional divorce team identify any potential conflicts between the divorce settlement, home equity solutions, and real property issues.
Involving a Certified Divorce Lending Professional (CDLP®) early in the divorce settlement process can help the divorcing homeowners 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.
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