The term "vetting" is widely used in today's political and business landscape. But what does vetting mean, and how does it fit into divorce mortgage planning?
Understanding Vetting
Vetting involves conducting a thorough and diligent review of a person, document, property, investment, or solution. In the context of divorce, vetting your professional divorce team is crucial. Ensuring that they are reputable and knowledgeable and will work well with you is essential. The divorce team can include the attorney, financial advisor, mediator, divorce mortgage planner, and real estate professional.
The Role of Vetting in Divorce Mortgage Planning
Vetting the home and other real properties extends beyond determining whether they are marital or non-marital. It involves examining specific details such as property ownership, tax status, value, and available equity. These elements are critical to the divorce settlement process and may determine the type of mortgage financing available, independent of credit scores and income.
Comprehensive Divorce Mortgage Planning
Divorce Mortgage Planning involves a detailed analysis of various income sources, including employment, support income, or no income, and strategies for creating qualifying income through financial and tax planning. It also includes evaluating and distributing marital or individual debt during the divorce. A thorough vetting process of the home, income, and consumer debt places divorcing homeowners in a stronger position to make informed decisions about their home equity solutions.
The Preapproval Process
For decades, mortgage lenders have vetted potential home buyers and mortgage borrowers to reduce default risks. Obtaining mortgage preapproval has long been standard practice for homebuyers, demonstrating their financial strength to complete the purchase transaction. Similarly, a preapproval should be one of the first steps for a divorcing spouse before agreeing to refinance the marital home.
An Equity Buyout Preapproval should also be required by the spouse retaining the marital home if new mortgage financing is necessary. This includes situations where refinancing is needed to remove the vacating spouse from the current mortgage or when the in-spouse needs to buy out the equity ownership from the out-spouse in cash.
The Value of a Certified Divorce Lending Professional (CDLP®)
Vetting the divorce mortgage planner is another crucial step. A Certified Divorce Lending Professional (CDLP®) is a divorce mortgage planner with extensive training and background knowledge. The CDLP® brings immense value to the divorce team during the settlement process due to their comprehensive understanding of the intersection of family law, tax law, real estate, and mortgage financing. This expertise distinguishes them from other mortgage professionals in the industry.
Why Who You Work With Matters
A successful divorce settlement results from assembling the pieces of the puzzle in a manner that ensures both divorcing spouses emerge whole. Each member of the professional divorce team should contribute 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 can help both spouses obtain new mortgage financing post-divorce. As a divorce mortgage planner, the CDLP® can assist divorcing homeowners in making informed decisions about 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.
Get the Right Guidance
Contact a CDLP® today for a copy of the Divorcing Your Mortgage Homeowner Workbook, a comprehensive 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.
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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