The term vetting has become commonplace in today's political and business world. But what does vetting mean, and how does it fit into divorce mortgage planning?
Vetting means conducting a thorough and diligent review of a person, document, property, investment, or solution. In a divorce setting, vetting the professional divorce team is a critical step to make sure they will not only work well with you but that they are both reputable and knowledgeable. The divorce team can include any of the following: the attorney, financial advisor, mediator, divorce mortgage planner, and real estate professional.
Where does the vetting process fit into divorce mortgage planning?
The vetting process of the home and other real property goes beyond determining whether it is marital or non-marital. Whether it's the property ownership, tax status, the value, and equity available, the vetting process includes examining specific details of the marital home or other real property. Not only are the elements discovered during the vetting process critical to the divorce settlement process, but the details of the real property may determine what type of mortgage financing is available or not available, and this has nothing to do with credit scores and income.
Divorce Mortgage Planning includes a thorough analysis of the various income sources, including employment, support income, or no income, and what we can do to create qualifying income with financial and tax planning. In addition, how is the marital or individual debt being evaluated and distributed during the divorce? With a thorough vetting process, including the house, the income, and the consumer debt, divorcing homeowners are in a stronger position to make a more informed decision regarding their home equity solutions.
For decades, potential home buyers and mortgage borrowers have gone through a vetting process by the mortgage lender to reduce the risk of default. Obtaining mortgage preapproval to purchase a new home has been common practice for many years. A preapproval shows the home seller that the buyer has the financial strength to obtain mortgage financing and can complete the purchase transaction. The mortgage purchase preapproval is one of the first steps required for homebuyers, and it should be one of the first steps for a divorcing spouse before agreeing to refinance the marital home.
Equity Buyout Preapproval should also be required by the spouse retaining the marital home if new mortgage financing is required. For example, a refinance needed to remove the vacating spouse from the current mortgage or when the in-spouse needs to buy the equity ownership from the out-spouse in cash form.
Vetting the divorce mortgage planner involved is another crucial step. A Certified Divorce Lending Professional (CDLP®) is a divorce mortgage planner with extensive training and background knowledge. The CDLP® brings tremendous value to the divorce team during the settlement process because of their more vital perspective. Their understanding of the intersection of family law, tax law, real estate, and mortgage financing truly separates them from other mortgage professionals in the industry.
Who you work with really does matter!
A successful divorce settlement is a result of putting the pieces of the puzzle together in such a manner that both divorcing spouses come out of the divorce whole. Each member of the professional divorce team should bring value and perspective that benefits the overall outcome and success.
Working with a Certified Divorce Lending Professional (CDLP®) and incorporating Divorce Mortgage Planning into the divorce settlement may help both spouses obtain new mortgage financing post-divorce. 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 as well as real property issues.
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 are needing to refinance the marital home in an Equity Buy-Out situation or prepare to sell and purchase a new home post-divorce.
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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