The CDLP as a Financial Neutral

Dec 28, 2020

One of the most important team members in the collaborative divorce process is the financial neutral. The financial neutral is an impartial expert in his or her field. When a primary asset of the marital property is the marital home and other real estate assets, having a Certified Divorce Lending Professional (CDLP) as a financial neutral on your team becomes increasingly desirable.

In many divorce settings, negotiations break down over financial issues or concerns, oftentimes leading to litigation. The CDLP as a financial neutral offers both parties a balanced, thorough financial evaluation of the current mortgage and future mortgage financing requirements and offers realistic solutions to obstacles in negotiations.

Depending on each individual situation, the CDLP can perform a variety of functions in a collaborative divorce, such as: 

  • Assisting with the collaborative process by offering solutions and needs for both spouses to obtain immediate and future mortgage financing.

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The Marital Home and Mortgage Financing

Dec 21, 2020

The marital home: typically one of, if not the biggest marital asset. The two most common ways to deal with the marital home is for one party to retain the home and pay the other party their share of the equity by refinancing the current mortgage. The other way is the home is sold and the parties split the net proceeds.

The name, Equity Buy-Out, confuses some people into thinking they have to purchase the house from the other spouse. An Equity Buy-Out is actually handled as a refinance loan, not a purchase loan. There are two types of refinances that need to considered. Just because the court orders one party to buy the equity out of the other party, that doesn’t dictate the type of refinancing category it will fall under and each one has its own limitation and requirements to be met.

The two types of refinances are either a Rate/Term refinance or a cash-out refinance. Rate/Term refinances typically have better terms with regards to lower interest rates and access to...

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Why should a divorcing homeowner get preapproved for an Equity Buy-Out?

Dec 14, 2020

The marital home is likely to be one of the biggest assets in the marital estate. Not only one of the largest financial assets but likely to hold a great deal of emotions. The marital home may also offer comfort to one of the divorcing spouses as well as any children to the marriage.

When one spouse is seeking to retain the marital home, a mortgage refinance known as an Equity Buy-Out may need to be done. An Equity Buy-Out is a mortgage refinance of the current mortgage into the retaining spouse’s name as well as drawing out equity to acquire the vacating spouse’s equity ownership in the home.

One important, yet often overlooked, step in the Equity Buy-Out step is the preapproval process. 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 to successfully complete the purchase transaction. The mortgage purchase preapproval...

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Potential Hurdles that may Derail Mortgage Financing in a Divorce

Dec 07, 2020

The Certified Divorce Lending Professional (CDLP™) on the professional divorce team has many valuable roles. One role is to help assess the income sources for mortgage financing purposes as not all income may be ‘qualified income’. A CDLP™ can bring a different perspective to the divorce team while recognizing any potential hurdles that may arise during the settlement process that could potentially derail mortgage financing for either party.

Divorce and mortgage financing concerns are often a touchy subject in divorce situations. Particularly when one spouse is dependent upon income awarded from the divorce for mortgage qualifying purposes and also when contingent liabilities are present, such as a jointly held mortgage on the marital home. 

Having a basic understanding of how lenders look at the different sources of income awarded in a divorce settlement as well as how joint and contingent liabilities are handled can help you better serve your divorcing...

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How to Split Home Mortgage Interest in Divorce

Nov 29, 2020

How to Split Home Mortgage Interest in Divorce

Tax issues are generally not the paramount concern of couples going through divorce. However, failure to recognize and understand the impact divorce may have on Federal Income Tax filings may lead to unsavory results and unnecessary conflict with the IRS.

One question that many divorcing or divorce couples often fail to address until the time for filing taxes is fast approaching is: “Who gets to take the mortgage interest deduction?” Like many questions regarding divorce, the answer to this question depends on the circumstances of each individual case. Thus, it is important any individual who has recently finalized their divorce to seek the advice of a tax expert regarding the effect their divorce may have on their taxes. In fact, it is advisable to seek both the input of an experienced divorce attorney as well as a tax expert during the divorce process, to ensure that any Marital Settlement Agreement entered...

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Deducting Mortgage Insurance Premiums as Mortgage Interest Deduction

Nov 23, 2020

Deducting Mortgage Insurance Premiums as Mortgage Interest Deduction

Divorcing Homeowners often find themselves having less than a full 20% down payment when purchasing their new home. When a purchase loan in first lien position exceeds 80% loan to value, mortgage insurance may be put on the mortgage to protect the mortgage lender against potential loss in the future due to foreclosure, short sale, etc.

Can mortgage insurance premiums be deducted from income taxes as mortgage interest deduction?

You can treat amounts you paid during 2020 for qualified mortgage insurance as home mortgage interest. The insurance must be in connection with home acquisition debt, and the insurance contract must have been issued after 2006.

Qualified mortgage insurance.

 Qualified mortgage insurance is mortgage insurance provided by the Department of Veterans Affairs, the Federal Housing Administration, or the Rural Housing Service, and private mortgage insurance (as defined in section 2 of the...

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Alimony vs. Mortgage Interest Deduction

Nov 16, 2020

Alimony vs. Mortgage Interest Deduction

Not all payments under a divorce or separation instrument are alimony. Alimony doesn’t include:

  • Child support,
  • Noncash property settlements,
  • Payments that are your spouse’s part of community income,
  • Payments to keep up the payer’s property, or
  • Use of the payer’s property.


Under the written separation agreement, Spouse A lives rent-free in a home the Spouse B owns. Spouse B who owns the home must pay the mortgage, real estate taxes, insurance, repairs, and utilities for the home. Because Spouse B owns the home and the debts are his/hers, the payments for the mortgage, real estate taxes, insurance, and repairs aren’t alimony. Neither is the value of Spouse A’s use of the home.

If they qualify, Spouse B may be able to deduct the payments for utilities as alimony. Spouse A must report them as income. If Spouse B itemize deductions, he/she can deduct the real estate taxes and, if the home is a...

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A Deeper Look at the Mortgage Interest Deduction

Nov 09, 2020

The Mortgage Interest Deduction May Be a Great Tax Planning tool as long as you understand what you are working with.

Qualified Home

In order to use the mortgage interest deduction, the mortgage must be secured by a Qualified Home:

Main home.  You can have only one main home at any one time. This is the home where you ordinarily live most of the time.

Second home.  A second home is a home that you choose to treat as your second home.

  • Second home not rented out.  If you have a second home that you don’t hold out for rent or resale to others at any time during the year, you can treat it as a qualified home. You don't have to use the home during the year.
    Second home rented out. If you have a second home and rent it out part of the year, you must also use it as a home during the year for it to be a qualified home. You must use this home more than 14 days or more than 10% of the number of days during the year that the home is rented at a fair rental, whichever is...
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CDLP 3-Weeks to Launch Open Enrollment for December 2020

Nov 03, 2020

Get CDLP Certified with our New 3 Weeks to Launch Program!

Beginning December 1st, we will be offering our LIVE CDLP Certification training and CDLP Business Launch in a 3-week virtual workshop ~ So Exciting!

The CDLP 3-Weeks to Launch Program breaks down the CDLP Certification program and our proven 6 step CDLP Roadmap to Success program into a 3-week workshop presented live-online with Jody Bruns, President & Founder of the Divorce Lending Association.

We meet the first 3 weeks of each month, Tuesday and Thursday, from 9:00 am to 1:00 MST via GoTo Meeting. Each CDLP Certification Module is paired with a step in the CDLP Road Map to Success program. By the last day, you will be ready for your CDLP Certification Exam and your divorce lending practice will be structured and ready to launch as a CDLP!

Enrollment is now open for our next 3 Weeks to Launch workshop beginning December 1st thru 17th!

CDLP participants will get the benefits of learning Live from the comfort of...

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Should You Buy a New Home with Cash in a Divorce?

Nov 02, 2020

Divorce can be intricate, tricky and emotionally overwhelming. When you have to relocate, find new housing and decide to rent or purchase a new home, you pile on additional tasks and frustration.

Many divorcing spouses understand the financial benefits of owning a home rather than renting. While obtaining mortgage financing on any given day may often times involve a lot of paperwork and challenges, doing so during a divorce may seem overwhelming and out of reach for many.

For many reasons, divorcing clients may decide to purchase a new home with cash rather than obtaining mortgage financing. New home buyers who are in a position to pay cash for the new home need to make sure it is the right decision financially as it may cost you the ability to deduct the mortgage interest deduction on future mortgages on the new home.

The mortgage interest deduction is divided into two categories: Acquisition and Home Equity Indebtedness. Acquisition Indebtedness is any mortgage obtained to either...

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