In a divorce, we are often 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 where real property is involved.

The solution isn't as simple as who retains the marital home and who purchases a new property. Issues that need to be considered include how the structure of spousal support may directly affect qualifying income for an equity buy-out; identifying details about the real property that may impact options available for mortgage financing; considering how the phrasing in the marital settlement agreement may affect the ability for the vacating spouse to purchase a new home among other things.

Multiple perspectives are crucial to gain a complete understanding of a situation. For example, in divorce, different views on different topics can affect the divorcing spouses in different ways—either positively or negatively.

Take the following questions, for example:

  • How would you calculate spousal support when the paying spouse has fluctuating income or an irregular pay schedule?
  • How would you handle spousal support vs. a lump sum payout?
  • How do you evaluate the home equity, the home equity solutions, and the options available?

Your perspective or solution to these questions may satisfy the parties during the settlement process; however, the answer may negatively affect either party when obtaining mortgage financing.

Collaborating with the right team players results in different perspectives and better solutions!


What is the Vetting Process in Divorce Mortgage Planning?

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 ensure they will work well with you and are both reputable and knowledgeable. The divorce team can include any of the following: the attorney, financial advisor, mediator, divorce mortgage planner, and the real estate professional.

Where does the vetting process fit into divorce mortgage planning?

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Vetting the house is the 1st phase of 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, 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. 

Contact us today and let's further discuss how integrating Divorce Mortgage Planning into your case management can be a win-win for everyone involved.