7 Biggest Mistakes with a Divorce and a Mortgage

3 01 2012

Ughh.  If you clicked on this article, it was probably out of necessity, as most people find neither divorces or mortgages pleasant topics.  But be encouraged, there is hope for you and I would like to share some guidance that can save you thousands of dollars and hours of stress.

The personal side of a divorce can be a heartwrenching process, but the business side of a divorce is simple: It is simply a separating of joint assets.  Most divorcees make mistakes when they allow the business and the personal parts of a divorce transaction to intermingle, and I understand why.  It is tough to make intelligent, practical decisions during a period of emotional distress.

But here are 7 ways to make it through this period and come out for the best:

1. Find your personal and business “allies”– If you need a qualified counselor or listening friends, use them.  If you need a qualified attorney or competent financial planner, use them.  Just make sure you seek their help according to the help they can provide.  Trying to get your emotional healing from your divorce attorney instead of a counselor can be very expensive and pointless for both of you.

2. List out your assets and debts, and try to divide them as equally as possible– this is probably how they would be divided if you actually went to court.

3. Close joint credit card accounts to minimize your liability in the case of a spouse charging up the balances.  You may consider opening a small credit card in your name before filing the petition just for cash flow or incidental expenses, since once the divorce petition is filed, you will not be able to open up other debts.

4. Keep records of everything, and store them securely.  You will probably either need these documents during your divorce or your home finance transaction.

5. Usually there will be a change of residence during a divorce– you may sell the marital home and purchase another, or one party may refinance the other off the loan.  In either case, you will want to get a pre-approval from a solid lender for your exit plan– being prepared is golden.

6. In a divorce, many times the assets, liabilities, and even child support payments may change during the process.  For this reason I recommend choosing a lender who will meet with you in person and explain a couple of different ways to structure your approval should the details of your divorce change.

7. The more you can deal with your emotions outside of your divorce legal process or home finance process, the better your result with both will be.  “Winning” in court rarely feels like a win afterwards, and moving can be stressful enough on its own.

Good luck on the process.  There is plenty of life coming to you after the divorce, and when you are ready to tackle financing your home, I’d love to help you.

p.s.- I am a Mortgage Banker, not an Attorney.  For legal advice, please contact a licensed attorney knowledgeable in your area.  Best of luck!

Wilhelm Koenig

405.249.5993 cell

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