by questful | Dec 3, 2020 | Financial
Contemplating divorce can be one of the biggest life-time decisions you will ever make. Deciding how you get through the process can have a tremendous impact on how life after divorce will affect you emotionally and financially. The financial neutral is a key member of the collaborative team with the primary role of exploring and educating you and your spouse on various financial settlement outcomes by understanding the impact divorce will have to your financial future.
Divorce almost always doubles living expenses as two separate households are created, yet income rarely changes at least in the short run. The financial statistics post decree are alarming especially with the lower income earner or the stay-at-home parent who will have to re-enter the workforce. Working with the financial neutral, each spouse will create forward looking expense budgets that will help in identifying the needed income to meet essential living expenses. This information will then support a more comprehensive discussion on the level of spousal maintenance and employment income requirements to generate positive cash flow. The financial neutral will also be able to project your future retirement savings and net worth based on various financial settlement options which should facilitate constructive discussion around how marital property might be divided.
Working with a skilled and experienced financial neutral in the collaborative divorce team is a highly communicative, goals-based, and dignified resolution approach that tends to facilitate higher quality financial outcomes essential to healthier ex-spouse relationships with less negative impact to children.
by questful | Sep 5, 2020 | Financial, Uncategorized
You’ve been awarded the marital home through the negotiation process. What’s next? You’ll want to speak with a mortgage professional who specializes in divorce.
Qualifying to Refinance
You will need to qualify for the new loan using only your income and assets. You’ll need to provide paystubs, W2s, bank statements and your divorce documentation. In Colorado this would include your Separation Agreement (Memorandum of Understand) or notes from the Court. If you have children, you will also need to provide your Parenting Plan.
In the state of Colorado, a Divorce Decree is not necessary if it has not been issued yet.
Your credit will need to be in good shape as well. Best to keep debt to a minimum during the refinance process.
If you need to utilize support payments (alimony, child support) there will be a waiting period of 3 to 6 months. This is to ensure that the ex-spouse who is mandated to pay the support payments is actually doing so.
Removing a Name from the Mortgage
If your ex-spouse is on Title for the home, the Title Company involved with the refinance will create a Quit Claim Deed for your ex-spouse to sign with a notary. This will remove your ex-spouse from ownership of the home.
Taking Equity Out to Give to the Ex-Spouse
If the Courts award the ex-spouse equity from the home as part of the settlement the equity can be pulled from the home through the divorce as long as you qualify with the increased mortgage.
Summary
When it comes to refinancing your home, you would be wise to consider retaining the services of a lending professional who understands the nuances of the divorce process and ensure this professional is involved upfront and before the Divorce Agreement is finalized.
Jan Parsons Smith
Production Manager, NMLS #442729
jparsons@primelending.com
720-308-1320
by questful | Jul 28, 2020 | Financial, Uncategorized
Determining the value of your home for a fair assessment can sometimes be difficult. Often the disposition of the marital home can become cantankerous as well.
There are ways to obtain a fair and partial appraised value when going through divorce.
An appraiser can be hired by both parties (on average an appraisal in Denver Metro will cost between $550 and $650). Often two appraisals will be needed in order to satisfy both parties. Typically, home values are based on the last 6 months of sales in your neighborhood and the condition of your home.
A qualified Real Estate Professional can create an “Opinion of Value” in lieu of an appraisal. This may save you a few hundred dollars and may/may not be as accurate as an appraisal that has been completed by a qualified appraiser.
You may be sharing in gained equity of the marital home. If so, the value of the home is very important.
If you both cannot agree upon a value for the home, a Judge may be called upon to determine the value. This may/may not be wise so it might be best to reach an agreement prior to sitting in front of a judge.
If one of you will be awarded the marital home, often a refinance will be required to take the other spouse off the mortgage. If a value has been agreed upon and written into the agreement don’t always assume the value that the mortgage company’s appraiser will match exactly to the appraisal you had completed through the divorce. Because appraisals can be subjective, the values can vary between the “divorce appraisal” and the “refinance appraisal”.
Whether you choose to sell or refinance your home, an appraisal is a very important factor in determining the home’s value.
Jan Parsons Smith
Production Manager, NMLS #442729
jparsons@primelending.com
720-308-1320
by questful | Jul 28, 2020 | Financial, Uncategorized
Moving home is a significant undertaking at any time, but when you are also going through a divorce there can be some additional issues to consider. Many couples will need to sell property during a divorce so it is important to think about how you will manage this process. You should also ensure that you get all the support you need, not only from your divorce lawyer, but also through selecting a trustworthy and experienced realtor and appraiser to value and sell your property.
Should You Sell Your Home When You Get Divorced?
Dividing up your assets is a key part of arranging a divorce. Since the marital home is usually the largest asset that you share, it is essential to think carefully about what will happen to it when you separate. Putting the property on the market is the most common option for divorcing couples in Colorado, but it isn’t always the right choice for every couple and you shouldn’t feel pressured to rush into a quick sale. Selling a home for the right price can take time and properties in many parts of Colorado are in high demand so there is no need to rush to find a buyer.
Most couples who are divorcing in Colorado will decide to sell their home and then split the proceeds. However, there are other options that you may want to consider. For example, one partner may be able to refinance the mortgage and buy out the other. You might also want to delay the sale, for example if want to keep the family home for a while in order to provide continuity for your children. The best option for you will depend on your personal and financial circumstances, so it is important not to rush into your decision.
You may also want to consider the local real estate market before deciding on the best time to sell. Take a look at the listings for similar properties and talk to a realtor to get an idea of how quickly you will be able to find a buyer. Get your property valued so that you know how much it would take to buy out your partner or how much you could each make if you sell now. You might decide that it is better to wait a while before selling, to rent out the property temporarily, or to make some improvements in order to raise its value.
When you are ready to sell your home, you should consider how you are going to manage the process while separating. Although your realtor will be able to help, there are some decisions that you will need to take together. You may prefer to do this in person or through an intermediary, such as your divorce lawyers or another neutral party. You can get advice on the process from your lawyers or a realtor who has experience managing property sales during a divorce.
Preparing to Sell Your Home
The basic process of selling your home during a divorce will be the same as at any other time. You will need to choose a realtor, have your home valued, arrange showings, and decide what to do when you get an offer. However, since you will be in the process of separating while all of this is going on, it is important to communicate with each other (directly or via your lawyers) and to make the important decisions early on.
One of the key issues that you will need to discuss is the price you are willing to accept for the property. Getting the property valued by a realtor will give you a good idea of how much you should expect to make. Your divorce settlement will determine how the proceeds from the sale will be shared between you and you can ask your lawyer for advice on this.
The valuation is a guide to how much your property is worth, but you will still need to consider what you will do if a potential buyer makes an offer on your home. You will both need to agree on how low you are willing to go if an offer below the asking price is made. Deciding this before you put the property on the market will enable you to negotiate more easily with the buyer when you receive an offer as you won’t need to take more time to discuss it between yourselves. Accepting a lower offer can help you to achieve a quicker sale, but it could also impact your budget for buying your next home so it is important to consider this decision carefully.
Another issue that you will need to decide on before you put the property up for sale is how you will manage the process. You will have various tasks to complete in order to find a buyer and arrange the sale. Depending on your circumstances, you may want to divide these tasks between you or for one of you to take on responsibility for the entire process. Among the tasks that you may need to complete are:
- Preparing the property for sale (e.g. conducting repair work, touching up the decor)
- Choosing a realtor and arranging the valuation
- Setting up viewings or open houses
- Negotiating with buyers who make offers on the property (via your realtor)
- Arranging removals and ending contracts for utilities etc when you move out
Once you have a better idea of everything that needs to be done, it can also be a good idea to talk about the likely timeline for the sale. Your realtor can advise you on how long it usually takes for similar properties to sell in your area, but you may also need to consider factors such as your children’s schooling or how long it might take you both to find new homes to move into. If one or both of you are still living in the property, then you will need to take this into account when arranging viewings or setting the completion date for the sale.
Although it is impossible to set a definite timeline for the sale of your property, it can be helpful to have some idea of the timescale. You can set targets for accomplishing some tasks, such as arranging any repairs that need to be done or getting your house listed by a realtor. Doing this can help you both to make plans for your futures.
Buying a New Home After a Divorce
In addition to managing the sale of your shared property, you will each need to think about your next steps. You may want to buy your own property, so you will need to look for a new home at the same time as you are selling. You will need to consider two key points while you are searching for property to buy if you intend to use the proceeds from selling your marital home.
Firstly, you should work out how much your shared property is likely to sell for and how much your share of the proceeds will be as this is likely to determine your budget for the purchase. You will also need to take a careful look at your credit rating and finances in order to set your budget. It is a good idea to talk to a bank or mortgage lender early on so that you have a reliable estimate of how much you will be able to borrow. You can then ask your realtor for advice on your property search.
Secondly, you will need to consider what impact the sale of your shared home could have on the timing of your purchase or move. You may need to move into temporary accommodation if you get a good offer for your current property before you have a new home to move into. Alternatively, you may need to wait to complete the sale on your shared property until you or your ex-partner is ready to move out.
The realtor who is managing the sale of your shared property will also be able to advise you on your property search and to guide you through the process of buying a new home.
Starting the Sales Process
If you are in the process of divorcing, then you can contact a realtor to learn more about your options or to take the first steps towards selling your marital home. It is important to get all the facts so that you can make the right decisions about when to sell. You will also need to get the property valued so that you both know how much you are likely to receive for the sale, especially if you will be using the proceeds to purchase your next home.
The process of selling your home during a divorce will be very similar to any other property sale, but your personal circumstances mean that it is essential to communicate well and to coordinate your efforts. Discussing the property value and timeline with your ex-partner at the beginning of the process will ensure that you both have realistic expectations. You may also need to divide responsibility for various aspects of the sale between yourselves, although your realtor will be able to manage much of the process on your behalf.
Selling your home is a major life-experience, whether you are going through a divorce or not. Having a reliable realtor who knows the local property market well can make all the difference. If you need any guidance on selling your joint property or you want to arrange a valuation of your home, then you should get in touch right away.
Damon Chavez, Realtor
10135 West San Juan Way, #100
Littleton, CO 80127
Phone: (303) 649-6767
damon@coloradohousefinders.com
www.coloradohousefinders.com
by questful | Sep 8, 2019 | Financial, Uncategorized
When dividing assets in divorce most people, individuals, mediators and attorneys alike, tend to focus on the property division spreadsheet. Current asset and debt values from statements are deemed to be separate or marital and funneled onto the division worksheet. Typically, above all else, the focus and end goal is to split property 50-50. With so much emphasis on this spreadsheet that dictates the remainder of your financial future, is there anything missing that could dramatically skew the end results?
The old cliché of ‘nothing is certain in life except death and taxes’ rings loud and true in divorce, don’t ignore them. It is important to realize that the value of an asset can drastically morph, being cut in half or double in value depending upon when the funds are needed. Retirement accounts have tax benefits and may be invested more aggressively allowing funds to grow faster over a long period of time. Money doubles every 10 years if invested at a rate of 7.2% per year. However, if investments are needed to purchase a new home, pay legal fees or subsidize an individual’s life style, the amount of money available after-tax could potentially be cut in half.
Different tax rules need to be applied to different types of accounts. For example, annuities versus stock accounts have different tax rules. Roth accounts versus IRA or 401k accounts are significantly different and should be analyzed. Additional withdrawal expenses such as surrender fees may be applicable to some accounts or penalty waivers available in other scenarios.
There is a tremendous value in taking the time to sit down with a Certified Divorce Financial Analyst™ to support you in making informed decisions during your divorce regarding your future.
Amy Mahlen, CFP®, CDFA®
AM Financial
7887 East Belleview Ave., Suite 100
Denver, CO 80111
Phone: (303) 875-8730
amahlen@mahlenfinancial.com
www.mahlenfinancial.com
by questful | Sep 8, 2019 | Financial, Uncategorized
My spouse wants to quitclaim me off the Deed of our home in Denver, Colorado. What should I do? Most couples think once a spouse has been quitclaimed off a property deed of trust in Colorado Divorce, they are no longer responsible for the mortgage payments. By giving a quitclaim deed to your spouse, you have given up title “only” in the property.
I would strongly suggest you either refinance your Colorado real estate immediately or sell the house and forgo the quitclaim deed. The quit-claim deed is often used as a simple way to give up all interest rights in real estate. By giving up title to the property in a Colorado Divorce, you are still responsible for any loan that is in your name.
Typically, the spouse who keeps the real estate must refinance or sell the property to remove any mortgages. If you are quitclaimed off of the property, you still are financially obligated to make the mortgage payments on the house during the sale or refinance period. If mortgage payments are not made or made late, this could damage your credit score and affect your ability to purchase another house in the future. From our experience with separation of real estate in a divorce, we have seen one spouse intentionally make late mortgage payments to spite the other spouse. In addition, we have seen ex-spouses forgo the general maintenance on the house; whereby reducing the saleability of the house.
There is no reason to quitclaim either spouse from the real estate in a Colorado Divorce until the day of decree is final. Again, you need to protect your interest and make sure that any agreements regarding the mortgage should be carefully specified in the decree.
I would strongly recommend you seek legal advice prior to making any decisions regarding the dissolution of any interest in your Real Estate portfolio.
Damon Chavez, Realtor
10135 West San Juan Way, #100
Littleton, CO 80127
Phone: (303) 649-6767
damon@coloradohousefinders.com
www.coloradohousefinders.com
