Get your Divorce questions answered by Divorce Advice Colorado at the next monthly seminar the 2nd Sat of the month from 9:00-Noon, at St Philip Lutheran Church, Littleton. Offered in person or virtually, and walk-ins are welcome for anyone contemplating a separation or divorce. www.divorceadvicecolorado.com
Holidays are tough when contemplating a divorce or separation. A few items to keep in mind if just starting the process.
1. CREDIT: Maintaining good credit is important when qualifying for an equity buyout or purchase. For joint accounts that are not going to be refinanced or closed, remember that the other party can access that account, run up balances, and may not care about making payments-thus wrecking your credit.
2. CONTINGENT LIABILITIES: Debts can be assigned to a specific party as part of a settlement. Lenders do not need to count these items against you if it is not assigned to you. However-that does NOT remove you from being responsible for payments in the creditor’s eyes.
3. TIMING & DOCUMENTATION PROOF: Once a divorce petition has been filed, a finalized or temporary settlement signed by the court will be required for a new mortgage. The lender will want to refer to a legal document for guidance, especially if children are involved since maintenance and/or child support can be a factor for qualifying. There are specific guidelines regarding how long this income needs to be received and how long it has to continue in order to count as “qualifying” income.
4. JOINT CHECKING/SAVINGS: Split into individual accounts as soon as possible. For example: Husband will be paying wife child support/maintenance that she plans to use to qualify with, but the funds are deposited into a joint account. This does not work for a lender in terms of counting that income for qualifying since they both still have access to the funds.
5. BUYING BEFORE DIVORCE IS FINAL: Be sure to consult a lawyer or mediator on this! If one party wants to proceed with buying a new property before a divorce is finalized, a temporary settlement (filed with the court) may be needed to clearly state that this is the plan and that the other party agrees to have no claim to the new real estate. Property purchased during a marriage is considered marital property and the other party can stake a claim to it or increased equity -making it another asset to be sold and divided.
Involve a Certified Divorce Lending Professional (CDLP®) in the early settlement stages to work with the mediator or litigator and obtain a complete analysis of the mortgage financing requirements. In addition, a CDLP® can help identify additional income sources and the strategic assignment of debt obligations helping both spouses to be in a better position for mortgage financing.
Wanda Norge, Certified Mortgage Advisor (CMA), Certified Divorce Lending Professional (CDLP®), National Association of Divorce Professionals (NADP), Loan Zone Mortgage, LLC (NMLS: 1870102), 20 yrs experience, Phone: 303-419-6568, loans@wandanorge.com, www.wandanorge.com (NMLS: 280102h