Divorce mediators frequently encounter one question that can significantly affect the financial settlement:
What happens to the home and mortgage?
One spouse may want to remain in the home.
The other may need to be removed from the mortgage.
There may be an equity buyout.
One or both parties may need to qualify for another home.
Mortgage feasibility can therefore become an important part of the mediation process.
I’m John Madden, owner of Capital Funding Mortgage, and I have been originating mortgages since 1999.
My role is not to provide legal advice or participate in deciding how assets should be divided.
My role is to provide mortgage information and qualification analysis so the parties and their professional advisors can better understand what may be financially possible.
A settlement can say that one spouse will retain the marital home.
But the mortgage still needs to work.
We can evaluate:
This can help determine whether refinancing appears realistic.
If one spouse is required to compensate the other for a share of the home's equity, the new financing may need to cover:
Understanding the likely loan requirement before the agreement is finalized can reduce surprises later.
Changing ownership of the property does not necessarily remove a borrower from responsibility for the loan.
We can help explain possible mortgage solutions while the mediator and attorneys handle the legal aspects of title and settlement.
A departing spouse may need to purchase another residence.
Qualification may be affected by:
We can review the likely impact.
Depending upon the mortgage program, support income may potentially be considered for qualification when applicable requirements are satisfied.
Likewise, support obligations may affect debt qualification.
The exact rules depend upon the loan program and documentation.
We can also help evaluate more complicated circumstances involving:
The best time to discover that a proposed refinance cannot be completed is before the settlement becomes final.
Early mortgage analysis may help the parties and their advisors consider more realistic alternatives.
Capital Funding Mortgage provides mortgage financing guidance only.
Legal, tax, mediation, and settlement advice should come from the client's appropriately licensed professionals.
If you are a divorce mediator in Pennsylvania or New Jersey and have clients who need help understanding mortgage possibilities, I would be glad to assist.
John Madden
Owner, Capital Funding Mortgage
Personal Cell: 215-601-6724
Mortgage guidance to help clarify the financial options surrounding the marital home.What are your goals? We are committed to helping you reach them.
