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Navigating Mortgages During Divorce: Insights from The Divorce Mortgage Guy™ Don Moll

Family financial decisions, especially those involving the potential sale of a home, can evoke intense emotions and complex dilemmas. In a recent candid interview, seasoned mortgage professional Don Moll, CDLP® shared his personal experiences and professional insights on navigating mortgages during divorce. This article aims to encapsulate the essence of the conversation between Don Moll, CDLP®, also known as “The Divorce Mortgage Guy™” and Tina Keyes, CDC® of Florida Divorce Coaching and Mediation, bringing to light the crucial aspects of making informed decisions in the face of financial distress.



Understanding the Emotional Weight of the Home


For many couples going through a divorce, the home isn't just a building—it's a place filled with memories and emotional significance. It is often associated with traditional family values and stability for the children. The home can often become a major point of contention, not only because it is usually the most significant marital asset, but moreover because of the emotions it evokes in the divorcing spouses. As divorce professionals, we often seen how the threat of losing one’s home can hang like a dark cloud over divorcing families.


"It's not just four walls and a roof; it's a home with children, friends, schools, and stability.” - Don Moll


According to Don, while it is important for professionals to be sensitive to the emotions surrounding the home and understand why the client may want to keep the home, it is equally as important to take a step back and look at the finances of it. Don reminds us that it's more than just a mortgage payment. There are holding costs, escrow for taxes and insurance, and other maintenance expenses that go beyond what you might initially consider.


The Importance of Inspections


One critical piece of advice Don offered was the necessity of conducting thorough inspections, even if an appraisal was already conducted as part of the marital settlement.


"Many times, an appraisal doesn't catch issues like roof damage or black mold, as happened with one of my clients. I always recommend getting a detailed inspection to identify potential problems beforehand." - Don Moll


Bringing in Professionals Early


When asked about the timing of involving a mortgage professional who specializes in divorce, Don was clear: the earlier, the better. This is particularly crucial during the negotiation process, as post-judgment amendments can be challenging to secure.


"I tell attorneys and their clients to bring someone like me into the process as early as possible. For instance, if the marital settlement agreement and final divorce decree are signed without necessary financial provisions, it can be incredibly difficult to rectify later." - Don Moll


The Emotional Toll of Financial Decisions


One of the most poignant moments in the interview occurred when Don discussed the emotional burden of conversations involving the potential sale of a family home. He vividly described the heartbreaking nature of these discussions, especially when children are involved. The reality is that, all too often, agreements are made without consulting mortgage experts and then it turns out that the agreements can't actually be carried out due to underwriting restrictions or financial issues.


Moll recounted, "That's a call I dread making, especially when there's children involved and I got to call back and say, can't help you." Don highlighted how many times he wished he or another Certified Divorce Lending Professional® was brought into the conversation sooner to ensure that the options being considered were actually viable.


Don reminded us of the emotional toll that professionals in the divorce field sometimes contend with - they are not just dealing with numbers and assets - they are dealing with people's homes, memories, livelihood and emotions.


Strategies to Avoid Selling the Family Home


From the interview, several key strategies emerged that can help families avoid the drastic step of selling their home


1. Loan Assumption: Don explained that there are two primary types of loan assumptions—simple and qualified.

  • When discussing the Simple Assumption, Don explained that while you're assigning the responsibility of the mortgage payments to one spouse, this route can impact the other spouse's credit if payments are not made on time and, for that reason, is often not the preferred option for many divorcing spouses.

  • According to Don, with a qualified assumption, "the mortgage servicer qualifies you as the sole borrower based on your credit and financial capability, potentially allowing you to keep the original terms of the loan."


2. Refinance and Equity Buyout: This is another common route, particularly when one spouse wants to keep the home while compensating the other for their equity share. 


According to Don, "there's a difference between a simple refinance and an equity buyout. Structuring it correctly can allow you to access more equity and secure better financing terms."


Incorporating Support Income


Child support and alimony can play a significant role in mortgage qualification in the state of Florida, but they come with specific requirements and timelines, known as the 6-36 rule.


Don explains, "we need six months of receipt of support income before we can initiate a mortgage application, and we need to show that these payments will continue for at least an additional 36 months. Temporary orders can help start this clock even before the final judgment."


Don goes into detail in our interview about exactly how temporary orders work and why they can be incredibly useful in qualifying for a mortgage after divorce.


To summarize, Don suggests to "get temporary orders to start the clock on alimony payments, even if you haven't settled on the final amount. This ensures you can initiate mortgage applications sooner."


Leveraging Other Assets


Beyond traditional employment income, assets like retirement funds and trust income can also be utilized for mortgage qualification, but specific guidelines and strategic planning are required.


Don explains, "for example, if someone is receiving a lump-sum settlement, there are ways we can structure this to qualify them for a mortgage, provided we're involved early in the process."


Final Thoughts


Navigating the financial aspects of a divorce, especially involving substantial assets like the family home, demands expertise and careful planning. Don Moll's insights underline the importance of involving specialized professionals, such as a Certified Divorce Lending Professional® (CDLP®), as early as possible to ensure all intricacies are managed effectively.


Interviewer Tina Keyes, CDC® reminds, "from what we’ve discussed, it's clear that people need to reach out to professionals like you [Don] early in the process to avoid complications later."


Don reiterates, "Absolutely. Whether it’s myself or another qualified divorce mortgage planner, the key is to get involved early to explore all your options and ensure a fair, smooth process."


For those looking for expert advice, Don Moll, CDLP® aka The Divorce Mortgage Guy™, can be reached through his website at http://thedivorcemortgageguy.com or by email at dmoll@smprate.com.


Divorce is challenging enough without the added stress of complicated financial processes that most of us do not understand. By making yourself aware of the available options and involving specialized professionals early, you can help ensure a smoother transition into the next chapter of your life.



DISCLAIMER:  THE COMMENTARY AND OPINIONS AVAILABLE ON THIS BLOG POST ARE FOR INFORMATIONAL PURPOSES ONLY AND NOT FOR THE PURPOSE OF PROVIDING LEGAL, FINANCIAL OR PSYCHOLOGICAL ADVICE.  YOU SHOULD CONTACT AN ATTORNEY, FINANCIAL ADVISOR OR THERAPIST IN YOUR STATE TO OBTAIN ADVICE WITH RESPECT TO ANY PARTICULAR ISSUE OR PROBLEM.

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