Wednesday, August 10, 2011

Divorce and splitting equity in a home with a mortgage loan

Many times divorce requires one or the other of the ex-spouses to refinance the home mortgage.  The refinance accomplishes two things: 1) removes the other ex-spouse from the mortgage and the warranty deed and, 2) creates funds to pay out a portion of the home's equity to the ex-spouse signing off their interest in the home.

There are MANY options for refinancing to accomplish divorce decree requirements and finding the right one for the individual situation requires a broad product mix to be available.

My lending experience has uncovered the complex rules regarding the length of child support receipts, the amount of child support which can be counted when looking at the divorce decree and age of the children, and how much of the income can be be counted as a percentage of the total household income. 

I also rely on my trusted CPA Professionals to advise my clients on tax issues and questions when they arise.  A few examples of tax implication questions I have come across in the past: 1) divorce and property division, 2) 1031 exchanges and what benefit would be served by considering it, 3) equity division through home refinancing and future purchase of another property, and 4) future rental home purchase with equity coming from a divorce settlement.

I enjoy helping with divorce and equity division loans and will share my knowledge and expertise to make sure all parties are happy with the results. 


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