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  • Writer's pictureMark Taylor

Separation and Divorce

-Protecting Your Interest in Property- Mark Taylor, Senior Licensed Loan Officer, NMLS: 1504731

Divorce is a difficult time in anyone's life, and it can be particularly challenging when it comes to managing finances, especially in terms of mortgages. For many people, their home is the most significant asset they own, and the process of dividing assets can be complex and overwhelming.

When going through a divorce, it is common to feel unmoored and uncertain about how to proceed with big money decisions, such as refinancing or buying a new home. This is especially true for those who may have previously relied on a partner to handle financial matters, including mortgage payments.

One of the most significant issues that arise during a divorce is the division of assets, including the family home. For many couples, the home is one of the most substantial assets they own, and it can be difficult to determine what happens to it in the aftermath of a divorce.

There are two main things that happen when it comes to divorce and mortgages. One of the biggest concerns is whether someone can refinance their home or purchase another one. If they are staying with their children and their income source will be child support or alimony, it is important to understand if they can afford to refinance or purchase another home. This is where a mortgage professional can help by providing specific strategies and qualification guidelines tailored to an individual's unique circumstances.

Another significant concern is the timeline. Unfortunately, decisions about child support and alimony often come after the mortgage guidelines, which can result in significant delays in the home buying process. It is essential to understand that most of the time, one has to receive the money for six months before it is considered qualifying income. Therefore, it is advisable to consult a mortgage professional early on in the process, ideally even before the divorce is finalized.

While a cash-out refinance may seem like a good option to quickly and easily pay out the ex-spouse, it's important to note that it typically comes with higher interest rates and fees than a rate/term refinance. This means that over the life of the loan, the borrower could end up paying significantly more in interest and fees. Specific to divorces, a separation agreement or court-ordered division in equity can allow a rate/term transaction rather than going the more expensive cash-out route.

Many loan officers without experience in divorce and mortgage refinancing may not fully understand these caveats and may recommend a cash-out refinance without fully considering the long-term financial implications for the borrower.

When going through a divorce, there can be a lot of emotional stress and upheaval. However, with the right guidance, it is possible to navigate the process and come out on the other side with financial stability. A mortgage professional can provide valuable insight into your options, helping you make informed decisions about refinancing, purchasing, or selling your home.

In conclusion, divorce and mortgages can be a complex and challenging combination, but there are professionals who can help you through it. Working with a mortgage professional can help alleviate some of the stress and uncertainty of the process, and ensure that you make informed decisions for your financial future.

Mark Taylor | NMLS # 1504731 | AL: 67777, AZ: 0939604, CA: CA-DBO1504731, CO: 100520451, FL: LO35912, GA: 51692, ID: MLO-21237, IL: 031.0043598, KS: LO.0039017, KY: MC394725, LA:, MO: 18752-MLO, MT: 1504731, NE:, NV: 59226, NJ:, NM:, NC: I-170118, OR:, PA: 66651, RI:, SC: MLO-1504731, TN: 125173, TX:, VA: MLO-29826VA, WA: MLO-1504731, WV: LO-36484, WI: 1504731, WY: 6646

For information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. UMortgage LLC D/B/A UMortgage NMLS #1457759 Equal Housing Opportunity, 2022 All Rights Reserved.


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