Every divorcing couple has some kind of property that needs to be understood, discussed, and divided. Even couples who split up after a few months have wedding gifts to consider. Property, in general, can be considered as all of those things the couple has accumulated during the marriage.
It is common for the marital home to be the most substantial marital asset, both in terms of value and emotional significance. This emotional significance is especially significant when the issue becomes whether the children will continue to be able to live in the same home environment.
As divorce, almost by definition, suggests that parties will no longer be living together, determining what to do with the marital home or where the vacating spouse will live may be a priority decision to make.
Ideally, both parties will agree on the appropriate disposition of the marital home. The need for mediation support utilizing a skilled CDLP is important to make sure that the negotiated agreement can actually be executed as in refinancing the current mortgage obligation for an equity-buyout or selling the marital home and each party purchases a new home independently. Actually coming to the agreement of how to handle the marital home may be the easy part and executing the agreement may require a deeper look into the details.
A skilled mediator will recognize and explain the various options of the marital home available to the divorcing couple and help the parties understand the implications of each option. Again, addressing the details of each option requires the support of a Certified Divorce Lending Professional. Consider the following Scenario. Mike and Kim have been married for 17 years and have lived in the home for 11 years. Kim is employed as administrative support at the local school and will require spousal support in order to afford housing independently once the divorce is final.
- Mike would prefer to sell the home and divide the net proceeds equally between the two. Both parties would purchase new homes.
- Kim would prefer to stay in the home she is emotionally attached to as well as avoid the hassle of moving and purchasing a new home. Kim would agree to pay Mike his share of the equity in the marital home through a refinance of the marital home which would also remove him from any financial obligation on the home.
Through mediation efforts, Mike and Kim agree that Kim will retain the marital home and she agrees to a deadline of 120 days to complete the refinance process. Mike agrees to give his equity share to Kim in lieu of paying future spousal support. The parties also agree that if Kim is unable to complete the refinance within the 120 days, they will sell the marital home.
There may be a lot of potential issues with this negotiation and mediated agreement. Without the input and mediation support of a Certified Divorce Lending Professional (CDLP), Kim may not have the required income without the receipt of spousal support; the time frame in which the refinance is to take place may become an issue; and if the marital home is sold, Kim may still not be in a position to buy a new home.
Sometimes the couple has a budget or income problem that needs expert advice. The mediator is typically not an accountant or an attorney and therefore does not take responsibility for providing expert advice. The mediator refers the couple to an expert for specific advice on the specialty situation. Utilizing the expert advice of a Certified Divorce Lending Professional (CDLP) to address the options for obtaining future mortgage financing is an important step in the mediation process.
This is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact an attorney or tax professional to obtain legal and tax advice. Interest rates and fees are estimates provided for informational purposes only and are subject to market changes. This is not a commitment to lend. Rates change daily – call for current quotations.
Always work with a Certified Divorce Lending Professional (CDLP) when going through a divorce and real estate or mortgage financing is present.
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