Many times in a divorce, we are more focused on curing the problem at hand, i.e., distributing real property and assets, that we forget there is life after divorce. The biggest challenge is the lack of knowledge, understanding, and preparedness of how the various pieces of the divorce puzzle fit together and overlap.
The two most commonly asked questions are what is the difference between divorce lending and divorce mortgage planning.
- 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: A LOT!
What is divorce mortgage planning? If a picture is worth a thousand words, here it is:
This diagram shows just how intersected the four pieces of the divorce puzzle (Family Law, Financial and Tax Planning, Real Property, and Mortgage Planning) are when the home itself is center stage– all of these pieces of the puzzle converge with each other.
Divorce Mortgage Planning is a holistic approach to evaluating mortgage options in the context of the overall financial objectives relative to divorce situations. Working directly with the divorce team, a CDLP® understands the intersection of divorce, financial and tax planning, real property, and mortgage planning. The role of the CDLP® is to help integrate the selected mortgage into the overall long and short-term financial and investment goals to help minimize taxes minimize interest expense while maximizing cash flow.
Our mission is to help divorcing homeowners make more informed decisions regarding their home equity solutions and mortgage financing opportunities during and after the divorce. Founded in 2014, the Divorce Lending Association supports ethical lending standards and is dedicated to helping members through education and access to professional development opportunities working with divorcing homeowners.
This diagram only considers a fraction of possible overlaps yet amplifies the need for a knowledgeable and robust professional divorce team.
Capital gains may be involved, especially in today's real estate market. Support income directly affects mortgage planning. There may be a need to look at protecting the mortgage interest deduction. Property Disposition – it's not as simple as who gets the house and who moves out. Are we looking at an Equity Buy-Out or positioning both spouses to purchase a new property?
What's the advantage of working with a Certified Divorce Lending Professional? The answer is knowledge.
When the home is involved, a Certified Divorce Lending Professional has the background knowledge to support the divorce team and the divorcing homeowners. The CDLP's knowledge goes beyond mortgage industry guidelines. Any mortgage lender who can read underwriting guidelines can do a loan for a divorced homeowner, aka divorce lending.
- The value that a CDLP® brings to the table goes much further than divorce lending and how to interpret mortgage regulations and guidelines. A CDLP® supports and works directly with the family law professionals helping the divorcing homeowners make more informed decisions regarding their home equity solutions.
- A CDLP® is capable of working with the divorce team to apply financial and tax planning strategies to meet income requirements.
- A CDLP® is competent in identifying contradictions between the marital settlement agreement and mortgage regulations while skilled at working toward solutions with the divorce team.
- Are you interested in more information? Then, schedule a meeting with a Certified Divorce Lending Professional, and you'll have a much clearer understanding of not only the difference between divorce lending and divorce mortgage planning, but you'll truly see the difference a CDLP® can make.
The Certified Divorce Lending Professional program is offered by the Divorce Lending Association, who's contributors have years of family law, financial and tax planning, and real property and mortgage planning experience. So who you work with really does matter.
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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