Divorce is a complex process that requires seamless collaboration between multiple professionals to secure a client's financial future. Divorce financial planners guide clients through asset division, retirement planning, and long-term financial stability. When it comes to real estate and mortgage decisions, the expertise of a Certified Divorce Lending Professional (CDLP®) complements the work of the financial planner.

CDLP®s enhance the financial strategy by offering specialized insight into mortgage financing and real estate. They ensure that all decisions align with the client’s financial plan and ability to obtain mortgage financing. Together, divorce financial planners and CDLP®s form a powerful team, providing comprehensive support throughout the divorce process.

"When a Certified Divorce Lending Professional (CDLP®) and a divorce financial planner collaborate, they bring a powerful combination of expertise to the table. Together, they can create strategic solutions that meet immediate financial needs and support long-term stability for divorcing homeowners. This partnership ensures that clients receive a holistic approach, integrating mortgage planning with broader financial considerations to secure a stronger financial future." — Jody Bruns, President, Divorce Lending Association

The Distinct Roles of a Divorce Financial Planner, CDFA®, and CDLP®

A divorce financial planner or Certified Divorce Financial Analyst (CDFA®) helps divorcing clients understand how to divide assets, plan for future financial security, and manage the impact of alimony or child support. A CDFA® professional is skilled at analyzing data and providing expertise on the financial complexities of divorce. They help clients and attorneys understand how today’s decisions will impact their financial future. They take a broad view, assessing how clients can maintain cash flow and sustain their lifestyle post-divorce.

In contrast, a CDLP® focuses specifically on mortgage-related issues arising from the real estate division. They ensure that mortgage financing for refinancing or new home purchases aligns with the client’s financial goals while also considering the underwriting guidelines that lenders require. Where a financial planner or CDFA® might calculate income and cash flow based on future projections, a CDLP® ensures these calculations meet the stricter requirements of mortgage lenders.

By working together, CDFA® professionals and CDLP®s provide comprehensive, practical financial plans for divorcing clients—addressing both immediate real estate decisions and long-term financial goals.

Complementary, Not Competing: How CDLP®s, CDFAs®, and Financial Planners Work Together

1. Income Calculations: Cash Flow vs. Underwriting Standards

One area where financial planners or CDFAs® and CDLP®s complement each other is income calculation. Financial planners and CDFAs® typically assess a client’s income from a cash flow perspective, evaluating how assets like investment accounts and retirement income can provide a steady stream of funds for the client’s future. A financial planner or CDFA® may advise clients on balancing these accounts to ensure long-term financial stability.

However, a CDLP® must evaluate whether these same retirement accounts or investment portfolios can be used as qualified income under mortgage guidelines. For instance, a CDFA® might see an investment account as providing ample monthly income through withdrawals. A CDLP®, however, will assess whether that income meets the mortgage qualification standards, which depends on factors like how long the funds will last and the type of assets held. Mortgage underwriting guidelines are often stricter than cash flow calculations, meaning income sources acceptable to a financial planner or CDFA® may not meet a lender’s standards.

This collaboration ensures that the financial plan and the mortgage strategy work together, allowing clients to meet long-term goals while securing necessary financing.

2. Real Estate and Mortgage Viability

A key responsibility of a CDLP® is assessing whether a divorcing client can realistically qualify for a mortgage after the divorce. This involves evaluating income and considering creditworthiness, debt-to-income ratio, and the overall financial picture post-asset division.

While a financial planner or CDFA® works to create a balanced asset division that supports long-term financial health, a CDLP® ensures that these decisions translate into viable mortgage financing. For example, if a spouse plans to retain the marital home, the CDLP® will determine whether they can refinance it under their name based on their new financial reality. This insight prevents unrealistic settlements that could leave a spouse financially strained or unable to secure the necessary financing.

3. Collaborating on Long-Term Real Estate Strategies

When the marital home is involved, the stakes are high. Whether one spouse keeps the house or both purchase new homes, these decisions must fit into the overall financial plan.

A divorce financial planner or CDFA® protects the client’s retirement plans, investments, and other assets. At the same time, a CDLP® makes sure that mortgage financing for new home purchases or refinancing is feasible. Together, they ensure the client can navigate real estate transactions without overextending financially.

The CDLP® is an extension of the financial planner or CDFA®, focusing on mortgage and real estate matters to ensure clients make informed, financially feasible, and sustainable decisions.

4. Debt and Mortgage Qualification

Divorce often leaves one or both spouses with new debts, such as when one spouse buys out the other’s share of the home. Managing this debt is crucial for both financial planning and mortgage qualification.

A divorce financial planner or CDFA® evaluates how clients can handle these debts within their overall cash flow to maintain long-term financial security. Meanwhile, a CDLP® looks at how this debt impacts the client’s ability to qualify for a mortgage. They assess the effect on the debt-to-income ratio, a key mortgage underwriting factor. Together, the financial planner, CDFA®, and CDLP® ensure that the client’s debt doesn’t prevent them from securing future mortgage financing.

CDLP®s: Enhancing the CDFA®'s or Divorce Financial Planner’s Practice

The collaboration between a CDLP® and a divorce financial planner or CDFA® strengthens the services provided to divorcing clients. A financial planner or CDFA® focuses on big-picture financial planning, ensuring that the settlement supports long-term financial health. Meanwhile, the CDLP® provides specialized mortgage expertise to ensure that financial plans are feasible within the context of mortgage lending and real estate.

By working together, these professionals offer a comprehensive service that addresses both macro-level financial planning and specific real estate and mortgage needs. This partnership ultimately leads to better client outcomes, ensuring their financial security and ability to secure mortgage financing are aligned.

A Certified Divorce Lending Professional and a divorce financial planner or CDFA® are not competitors but partners who work together to protect their client’s financial interests during a divorce. Combining their expertise ensures that mortgage and real estate decisions fit seamlessly into the broader financial strategy, giving clients the confidence and support they need to move forward.

How are you integrating divorce mortgage planning with a CDLP® into your financial case management as a divorce financial planner or CDFA®? Working together with a CDLP® enhances your practice and ensures that your client's real estate decisions support their long-term financial goals.

 

This is for informational purposes only and does not provide legal or tax advice. You should contact an attorney or tax professional for legal and tax advice. Interest rates and fees are only estimates provided for informational purposes and are subject to market changes. This is not a commitment to lend. Rates change daily - call for current quotations. 

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