In many divorce cases, the focus is often on distributing real property and assets, overlooking the life that follows. The biggest challenge is the lack of knowledge, understanding, and preparedness about how the various pieces of the divorce puzzle fit together and overlap.
Common Questions in Divorce Mortgage Planning
Two of the most commonly asked questions are:
- What is the difference between divorce lending and divorce mortgage planning?
- What’s the advantage of having a Certified Divorce Lending Professional (CDLP®) on your divorce team over a traditional loan officer?
The answer to both questions is significant!
Understanding Divorce Mortgage Planning
Divorce Mortgage Planning is a holistic approach that integrates the desired outcomes with the necessary details and clarity into an executable settlement agreement, ensuring closure and peace of mind. This process involves a unique understanding of the intersection of family law, financial and tax planning, real property, and mortgage planning.
The Intersection of Key Elements in Divorce
The diagram below illustrates how the four pieces of the divorce puzzle (Family Law, Financial and Tax Planning, Real Property, and Mortgage Planning) intersect when the home is the focal point. These elements converge, highlighting the need for a knowledgeable and robust professional divorce team.
- Capital Gains: Potential capital gains may be involved, especially in today's real estate market.
- Support Income: Support income directly affects mortgage planning.
- Mortgage Interest Deduction: There may be a need to protect the mortgage interest deduction.
- Property Disposition: Deciding whether to pursue an Equity Buy-Out or position both spouses to purchase new property.
The Advantage of Working with a Certified Divorce Lending Professional (CDLP®)
The primary advantage of working with a CDLP® is their extensive knowledge and expertise.
- In-Depth Knowledge: A CDLP® has the background knowledge to support the divorce team and the divorcing homeowners. They go beyond simply understanding mortgage industry guidelines.
- Comprehensive Support: A CDLP® provides support and works directly with family law professionals, helping divorcing homeowners make more informed decisions regarding their home equity solutions.
- Strategic Financial and Tax Planning: A CDLP® is capable of working with the divorce team to apply financial and tax planning strategies to meet income requirements.
- Identifying and Resolving Contradictions: A CDLP® is skilled at identifying contradictions between the marital settlement agreement and mortgage regulations and working towards solutions with the divorce team.
Why Who You Work With Matters
The Certified Divorce Lending Professional program, offered by the Divorce Lending Association, includes contributors with years of experience in family law, financial and tax planning, and real property and mortgage planning. Choosing the right professionals can significantly impact the outcome of the divorce settlement.
Conclusion
As a divorce mortgage planner, a CDLP® can help divorcing homeowners make more informed decisions regarding their home equity solutions. They assist the professional divorce team in identifying potential conflicts between the divorce settlement, home equity solutions, and real property issues.
Contact a CDLP® Today
Involving a Certified Divorce Lending Professional (CDLP®) early in the divorce settlement process can help divorcing homeowners set the stage for successful mortgage financing in the future.
For more information, contact a CDLP® today and request 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, 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.
Copyright 2022—All Rights Divorce Lending Association
