For most middle-class families, their home is their largest asset. While homeownership certainly has its perks, a mortgage can present problems if you decide to end your marriage.
Regardless of what your divorce agreement says, the law clearly states that both spouses are liable for the mortgage if their names remain on the loan. Even if the marital settlement agreement says your spouse is responsible for the mortgage, the bank can come after you if they miss a payment and your name is still on the loan. This means you’ll generally need to either refinance the mortgage in one person’s name or sell the house and split the proceeds. Working with a Certified Divorce Lending Professional (CDLP™) can help you determine the best way to move forward.
What it Means to Be a CDLP™
A CDLP™ is an experienced mortgage professional who has completed a rigorous training program offered by the Divorce Lending Association and passed a certification exam. After earning their initial certification, all professionals who wish to maintain their CDLP™ credential must complete yearly continuing education requirements designed to ensure they remain up to date on all tax and legal changes that could affect the divorcing homeowner’s mortgage planning process.
CDLP™ training covers topics such as:
- Equitable distribution and community property laws
- Different types of property in a marriage
- Retirement accounts and divorce
- Options for dividing real estate in a divorce, including equity buy-out and real property disposition
- The process for transferring ownership of real property
- Ways that divorce agreements can affect the mortgage interest deduction
What a CDLP™ Can Do for You
While a typical mortgage professional simply helps you complete paperwork and ensures your application is processed in a timely fashion, a CDLP™ takes a holistic look at the intersection of family law, financial and tax planning, real property, and mortgage planning, so you’re better equipped to reach your short-term and long-term financial goals. Most often, they are considered a member of the professional divorce team and will collaborate with your attorney and the financial professionals you’ve already retained.
Ideally, you should get a CDLP™ involved in the divorce process as soon as possible. If you wait until you’ve already started resolving issues via mediation or arbitration, you risk coming up with a plan that isn’t truly in your best interests. Proactively involving a CDLP™ prevents unnecessary headaches.
Depending on your specific needs, a CDLP™ can help you gather necessary financial documents, compile estimated post-divorce budgets, analyze mortgage and real estate data, and run hypothetical scenarios to help you see how different options will affect your finances. A CDLP™ can also demystify the mortgage lending process by answering questions such as:
- How can I keep the house?
- What do I need to do if I want to refinance the house?
- Can I buy a new house while going through a divorce?
- Can I refinance if I am just receiving child support and have no income of my own? What about if I’m self-employed or only work part-time?
- Do I have to sell the house if my spouse and I disagree about what to do with our mortgage?
While each spouse needs their own lawyer in a divorce, a CDLP™ is a financial neutral who can represent both parties. However, if your spouse is not interested in working with a CDLP™, you can still utilize these services independently.
Finding a CDLP™ in Your Area
The Divorce Lending Association is proud to have CDLP™ certified members located throughout the United States. If you are interested in working with a CDLP™ to evaluate your divorce mortgage planning options, use our directory to find a professional in your area.
When you meet with your CDLP™, you’ll receive a free copy of the Divorcing Your Mortgage Homeowner Workbook. This helpful guide features tips on managing consumer debt, determining how much your home is worth via an appraisal or a Comparative Market Analysis (CMA), preparing to purchase a new home after selling the property, and completing an equity buy-out refinance.