This is an excerpt from Chapter 2 of Certified Financial Planner™ Scott O’Brien’s brand new e-book Surviving to Thriving: A Financial Resource for Divorcées and Widows. This e-book brings you in depth information from 7 experts across industries to help women manage the financial and personal elements of life’s major transitions. Download your complimentary copy today.
By: Rebecca L. Thorburn, CDLP®
Divorce Real Estate Professionals® at rebeccashomeloans.com
If you are divorcing and have an existing mortgage or want to buy a new home, talk to a mortgage lender – preferably a Certified Divorce Lending Professional® (CDLP®) – early in the divorce process.
A CDLP® has special training and expertise to navigate the complicated intersection of mortgage lending, real property laws and tax codes. CDLP®s work with attorneys or financial advisors and their clients to:
- Identify the options for and implications of dividing residential real estate
- Identify divorce settlement agreement elements necessary to support future residential real estate financing needs
- Manage post-settlement residential property transactions
A CDLP® can help you and your attorney or financial advisor make decisions about existing residential real estate and prepare you for future residential real estate financing needs. Your goals for future home ownership are critical to understand early in the divorce process so your attorney can help craft a settlement that supports them. However, attorneys and financial advisors are not experts at mortgage financing, the same way loan officers are aren’t experts on the law or financial planning, and a CDLP® can step in to provide that expertise and detailed recommendations specific to your mortgage situation and goals.
Even if you did not engage a CDLP® during the divorce process, one can help you after the divorce as well. Their additional training will help ensure a smooth process for a refinance or a purchase.
Find a CDLP® near you from the Divorce Lending Association.
You Have Options
When a divorcing couple co-owns residential real estate, there are a few options for them to divide that home.
Selling the house and dividing any profits (or losses) is generally the easiest approach from a financial and transactional standpoint. Other considerations, such as maintaining stability for kids or keeping kids in the same school district, may prevent this from being a good option, however. If you or your soon-to-be ex want to keep the home, be very clear on the reasons for doing so.
Another option is for one spouse to buy out the other. In this case, it is necessary for the “departing” spouse – the one who will no longer own the home – to be removed from the mortgage through a refinance. Yes, that is a necessary step! This is very important and often misunderstood. The divorce settlement agreement awarding the property to one person is in effect a “Quit Claim Deed” that removes a party from the title of a residential property. However, a Quit Claim Deed does NOT remove a party from the mortgage. This party continues to be obligated on the mortgage until they are refinanced off the loan.
Surviving to Thriving: A Financial Resource for Divorcées and Widows brings you practical advice from 7 experts across specialities to help women manage the financial and personal elements of life’s major transitions. Get your complimentary copy today.
Rebecca L Thorburn
Rebecca L Thorburn is a mortgage loan officer with PrimeLending (NMLS #1369022) and Certified Divorce Lending Professional®. Leveraging her prior experience in high tech marketing and strategy consulting, Rebecca delivers an exceptional mortgage loan experience to her customers. Expect personal service, education, and open communication.
Rebecca’s expertise spans mortgage loans for residential home purchases and refinances, including jumbo loans, renovation loans, second/vacation homes and investment property loans. As a CDLP®, she offers specialized assistance to family law attorneys and individuals in a divorce situation as they navigate the options and complicated details related to dividing property, managing current mortgages, and preparing for future mortgages.
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