Collaborative Divorce Texas

  • Donate
  • For Professionals
    • Membership Advantages
    • Events/Training
    • Become a Member
    • For Students
    • Volunteer at CDT
    • Advertise With Us
  • Contact Us
  • Login
  • Home
  • Find a Collaborative Professional
  • What is a Collaborative Divorce?
    • What is Collaborative Divorce?
    • Frequently Asked Questions
    • About CDTexas
    • Master and Credentialed Collaborative Divorce Professionals
    • The Gay G. Cox Award for Excellence in Collaborative Law
  • Blog
  • For Collaborative Professionals
    • Membership Benefits
    • Events/Training
    • Become a Member
    • For Students
    • Advertise With Us
    • Volunteer at CDT
    • Login
  • Donate
  • Contact Us
  • What is Collaborative Divorce?
    • What is Collaborative Divorce?
    • Why Use a CDTexas Member?
    • About Us
    • Master and Credentialed Collaborative Divorce Professionals
    • The Gay G. Cox Award for Excellence in Collaborative Law
  • Testimonials
  • FAQs
  • Blog
  • Find A Professional
    • How Do I Choose a Collaborative Professional?
    • Attorneys
    • Financial Professionals
    • Mental Health Professionals
    • See All

Donate

You are here: Home / Blog / Top 5 Mistakes in Refinancing During a Divorce

Top 5 Mistakes in Refinancing During a Divorce

March 12, 2010 By CDTx Staff - tcgi Leave a Comment

Because equity in a house is often one of the largest assets acquired during a marriage, that equity often becomes the focus of attention by both parties who are trying to favorably divide up their assets.  In some cases, there will be little cash available to the parties unless they can find a way to pull out some of the house equity, and that’s not always easy.   As the parties and their attorneys and financial advisors research the  possibilities, they often run into problems that require specialized help.  Here are some common issues that arise.

1. Not monitoring joint accounts and assuring payments are current. Often times someone may forget that a credit card is actually a joint account because one party or the other has been used to using that card exclusively. Knowing exactly what accounts report on your credit rating is supremely important during and after the process of divorcing. Of course, timely payments on one’s own accounts is obviously important.

2. Qualifying or disqualifying a potential borrower. Many times parties will sit around a negotiating table and rely on inaccurate information to say “Oh, any bank would be happy to have that loan” or, the opposite “There’s no way in the world he/she can get financing.” No one except a competent Divorce-Mortgage Specialist can make that determination. Additionally, guidelines that applied a mere few weeks ago may not still apply. Just because a borrower got a loan before does not guarantee they will get one presently or in the future. New rules (especially ones enacted in 2009) require more than just a good credit score or good income or good assets.

3. Informal and good faith agreements that are documented poorly or not at all. Child and spousal support is often contemplated but constructed informally. For example, during the process of divorcing instead of paying support, a spouse may often agree to make payments on certain accounts that will ultimately be assigned to his/her spouse. Such “income,” if needed to qualify for a mortgage loan, must be structured and documented in a very specific manner. A Divorce-Mortgage Specialist can recommend the proper method and assure a potential borrower is prepared for mortgage qualifying.

4. Waiting too late to apply and qualify. It may be tempting to procrastinate or even assume that there will be no problems,  given previous mortgage qualifying. There is nothing to be gained and much to be lost by waiting. As soon as someone contemplates divorce, it is important to spend a few minutes consulting with a Divorce-Mortgage Specialist. Nearly all problems can be resolved in time. But, once terms of a divorce are set, it is costly and most times impossible to change them. In our experience, no client has benefited by waiting to apply for mortgage evaluation and approval.

5. Relying on well-intentioned friends or acquaintances for mortgage advice. Even former mortgage professionals should know that guidelines change frequently and advice given a year ago is not reliable today. Since the “mortgage meltdown” of 2007-2009 and the ensuing barrage of regulatory belt-tightening, the landscape of mortgage qualifying may be somewhat recognizable but it is also surely unmapped. The only rules that matter to the borrower are the rules that the people with the money have. If we want to borrower their money, we generally have to play by their rules, the way things used to be notwithstanding.

The bottom line:  start early, be thorough and use good information.  I would add that you should also get help from a specialist.  It will save you time and money in the long run.

Contributor:  Noel Cookman, http://www.themortgageinstitute.com/, a mortgage broker and strong supporter of Collaborative Law.

About CDTx Staff - tcgi

Filed Under: Blog, Divorce and Finance, Financial Professional Perspective on Collaborative Divorce

Leave a Reply

Your email address will not be published. Required fields are marked *

Find a Professional

Getting started with the Collaborative Process?

First your need to connect with a trained Collaborative Professional.

[Find Out More....]

Articles by Category

Featured Video

  • Collaborative Divorce Testimonial
  • Child of Divorce

Why Collaborative?

  • Jennifer Leister
  • Steve Walker
  • Carla Calabrese
  • Dawn Budner
  • Becky Davenport
  • Jody Johnson
  • Honey Schef
  • James Urmin
  • Kurt Chacon
  • Natalie Gregg
  • Robert Matlock
  • Deborah Lyons
  • Carlos Salinas
  • Camille Scroggins
  • Linda Solomon
  • Richard Soat
  • Lisa Rothfus
  • Jeffrey Shore
  • Barbara Cole
  • David Brunson
  • Jennifer Tull
  • Syd Sh
  • Susan Z. Wright
  • Christi Trusler
  • Camille Milnser
  • Linda Threats
  • Sarah Keathley
  • MaryAnn Kildebeck
  • David Bouschor
  • LIsa Marquis
  • Harry Munsinger
  • Vicki James
  • Robin Watts
  • Katie Berry
  • Jack Emmott
  • Jennifer Broussard
  • Patricia Havard
  • Paula Locke Smyth
  • Laura Schlenker
  • Norma Trusch
  • Brett Christiansen
  • Tim Whitten
  • Mickey Gayler
  • Melinsa Eitzen
  • Julian Schwartz
  • MaryAnn Knolle
  • Chad Olsen
  • Chris Farish
  • Charles Quaid
  • Anne Shuttee
  • Barbara Runge
  • Rhonda Cleaves -
  • Jamie Patterson
  • Catherine Baron
  • Kristen Algert
  • Sandra Roland
  • Rhonda Cleaves 2
  • Gratia Schoemakers

Have you read?

Why Baby-Boomer Divorces are Soaring

The U.S. divorce rate peaked in the late 1970s and began falling, except among persons born between 1946 and 1971.  Baby boomer divorce rates doubled after 1990, and among couples over 65, the divorce … [Read More...]

More Articles from this Category

The Collaborative Law Institute of Texas

d/b/a
Collaborative Divorce Texas

Proud Members of IACP

1400 Preston Road
Suite 400
Plano, TX 75093
(972) 386-0158

Please note: Our office will be closed on

Holiday closures:
Limited: Nov. 23rd & 24th
Closed: Nov. 25th , 26th and 27th

Christmas:
Closed from December 24-December 30, 2022.
Offices open on January 2nd, 2023.


Website Terms of Usage

Contact Our Webmaster

 

Follow Us

  • Facebook
  • LinkedIn
  • Twitter
  • Vimeo
  • YouTube

Search Our Website

Find A Professional

  • Find a Collaborative Professional
  • Attorneys
  • Financial Professionals
  • Mental Health Professionals
  • See All
EnglishFrançaisDeutschItalianoPortuguêsEspañol

Copyright © 2023 · Collaborative Divorce Texas · All Rights Reserved

· · ·

Web Design and Maintenance by The Crouch Group