Revised Client Guide Final for mail
373259418729223872596187406140086631874067 Your Mortgage3042534-1464736The Definitive Guide2? Divorce Mortgage AdvisorsWho We Are703008780368At Divorce Mortgage Advisors, we believe that family law professionals and their clients deserve expert guidance on the role mortgages play in shaping settlement strategy. Our founders, Ross Garcia, CDLP, and Jason Crowley, CFA, CFP, CDFA, bringThat's what sets us apart.709042118641Professionals (CDLPs) has an in-depth understanding of the divorce process as well70299586901.4948646380943Table ofCONTENTSTop 8 Mortgage Misconceptions467The 3 Loan Buckets: An Overview810Fully Amortized vs. Interest-Only:13HELOCs: Another Option14The Loan Process: Start to Finish15What NOT To Do19“What-If” Analysis20Did You Know21Documents Needed22FAQ23Conclusion25Notes26? Divorce Mortgage Advisors3About the Authors27Top 8 Mortgage Misconceptions12575881371041.1258161989286Don’t expect preferential treatment just because you have a prior banking relationship. You need to meet their requirements to get approved. By limiting yourself to just one lender, you’re at the mercy of their rates, their guidelines,have options.2.All lenders have the same rules and requirements.Every lender has their own unique set of guidelines. These guidelines also vary based on loan amount, credit score, and property type (primary, investment, etc.).12615651370993.12588364956551252674742484While rates have increased slightly, they remain at near historic lows. Also,4.I’m still on a joint mortgage with my former spouse. I’m worried those payments will count against me when I apply for a new mortgage.1253349248080for the payments, a new lender will not debt service you for said payments (i.e., they won’t count against you).12575831370945.from the house.125981325488312632145017041253034748537I’m receiving spousal and child support. That will help me qualify.Generally speaking, child and spousal support require a 6-month history of receipt and 3 years continuance from the date of your loan application.I have a high income – getting a loan should be easy.1264196249042example, cash bonuses typically require a 2-year history and stock options are rarely considered.12575842234658.Qualifying depends primarily on your debt-to-income (DTI) and loan-to- value ratios (LTV). Unfortunately, lenders don’t weigh liquid assets heavily in determining whether you qualify.? Divorce Mortgage Advisors5Divorce Mortgage vs. Standard Mortgage: How They DifferNot all mortgages are created equal. Here’s what sets them apart.Divorce MortgageStandard MortgageHeightened Level of Lender Scrutiny46Lower interest rates for4(only applies for equity buyouts)6Detailed up-front feasibility analysis recommendedAlwaysRarelyTiming matters46Additional documentation required46Lending Professional recommended46? Divorce Mortgage Advisors712488034810721261157974703Protect your credit. If your spouse is buying you out of the family residence, payments could destroy your credit. The only way to truly protect yourself125336196820after the divorce (and include provisions to address what happens in the event the spouse doesn’t follow through).3002091177739Buy out your spouse.1263208316592for coming up with funds to buy out your spouse’s interest in the house. Thetaking a new mortgage that is bigger than the existing mortgage.12632114721801263214965816Tap into your home equity. Coming up with buyout funds is not the only great source of liquidity. Some of the most common reasons to tap into yourHELOCs, and other loans), establishing a cash reserve (emergency fund), home improvements, or paying attorney fees.126320567073912632049175711261549177094Do you have an adjustable rate mortgage (ARM)? If so, it’s important to understand how rising rates would impact futureLower your mortgage payment. With the extra expense that comes with12526912468061263878493632payments over a longer time frame). You can read the full article at .The 3 Loan Buckets: An OverviewConformingHigh-Balance ConformingJumboLoan Limit*Up to $453,100$453,100 -$679,650Over $679,650Loan sold toFannie Mae or Freddie MacFannie Mae or Freddie MacNOT sold to Fannie Mae or Freddie MacWho writes the guidelinesFannie Mae & Freddie MacFannie Mae & Freddie MacLenderWhy it mattersConsistent guidelinesConsistent, but more restrictive, guidelinesGuidelines vary by lender*Loan limits vary by county and change on an annual basis.Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) which purchase conforming loans from lenders. By selling loans to Fannie and Freddie, lenders gain access to funds for future loans.Jumbo Loans are not eligible to be purchased by Fannie and Freddie. As a result, lenders either sell jumbo loans to private investors or keep them as an investment.What guidelines matter most?Debt-to-income (DTI) ratio: Lenders want to ensure that you can repay your mortgage. If your monthly debts exceed a certain percentage of your monthly income, you won’t qualify.Loan-to-value (LTV) ratio: As simple as it sounds. Take your loan amount and divide it by your property value. The lower the LTV, the better.? Divorce Mortgage Advisors9Credit (FICO) score: There are three credit bureaus that issue credit scores (Equifax, Transunion, Experian). Lenders use the middle score to assess your creditworthiness.At Divorce Mortgage Advisors, we like to keep things simple.You want the best mortgage rate, and part of getting that will be understanding a few basics. With that in mind, here is a summary of the loan products available to you along with some relevant de?nitions:Adjustable Rate Mortgage (ARM)Lowerinitial rate and paymentRates andpayments can increase over timeFixed Rate MortgageRate andpayment remain consistentHigherinitial rates and paymentsAdjustable Rate Mortgage (ARM) Products:The following ARMS have a 30-year term.21180302551983/1 ARM -for the next 27 years based on an index rate plus a margin.2079697558035/1 ARM -the next 25 years based on your index plus a margin.2108528558167/1 ARM -the next 23 years based on your index plus a margin.21942065582210/1 ARM -for the next 20 years based on your index plus a margin.Fixed Rate Mortgage Products:244181228973●243553329612●243553228978●243042128983●926172271604òrate.Wait, there’s more!Here are some specialty loan products and strategies to be aware of.Cross collateral. Do you need the sale proceeds from your current house to come up with the down payment for your new house? That’s where a cross collateral loan comes into play.Departing residence. If you’re buying a new house and converting your primary residence to a rental property, you may be able to get credit for potential rental income. Some lenders will allow for a ‘fair market rent survey’ to determine the rental income credit.1248839725353Reverse mortgage. A reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM), allows you to use a portion of the equity inproceeds however you like. The loan payments can be deferred for as long as you occupy the property. Keep in mind you are still responsible for paying property taxes and homeowners insurance. There are a number of eligibility requirements. For instance, you must be at least 62 years of age.40-year term. A jumbo loan paid over 40 years. Since the payments are spread over a longer period, the payments are typically lower than a 30-year term which enables a borrower to qualify for a higher loan amount. 40-year terms typically carry higher rates than 30-year terms.We’ve really just scratched the surface here. Don’t hesitate to contact us for details.3924346469046952286813951540Fully Amortized vs. Interest-Only:Fully Amortized LoansConservativeapproachPayments consist of principal andinterestVoluntary principal paydowndoes notLoan is fullyof termpaymentInterest-Only LoansAggressiveapproachPayments consist ofinterest-onlyVoluntaryNo reductionprincipalin principal paydown doesbalancepayment7067044030753914184-6169401807338156239? Risk alert:increase dramatically.HELOCs: Another OptionA home equity line of credit (HELOC) is just that — a line of credit. Think of a HELOC like you would a credit card: You use it to make purchases, and then pay for those purchases later.Unlike a credit card, which is unsecured debt, a HELOC is secured because it’s backed by an asset with value: your house. When you make your mortgage payment each month, and as the market value of your home goes up, you’re building equity. A HELOC allows you to borrow against that equity.Once you’ve been approved for a HELOC, you can borrow as much or as little as you need. This is what sets a HELOC apart from a home equity loan, in which the bank lends you a lump sum. With a HELOC, you don’t borrow it until you need it.703633470266Most HELOCs have variable interest rates, which means they go up and down basedpoints, called a margin, to the prime rate.You can use a HELOC for many reasons, including:4Attorney Fees4Equalizing Payments4Emergency Funds4Home Improvement4Debt ConsolidationThe Loan Process: Start to FinishHere are 10 critical steps for you to understand to help ensure a smooth and successful loan closing.STEP 1Think Ahead6482441396011between a seamless closing and a stressful one. Start by having your mortgagedelinquencies or inaccuracies.In addition, you will likely receive a checklist of required documentation. Gather the documents in this list ASAP. There’s no avoiding it. The more information your lender has to work with up-front, the easier the process will be for all parties involved.STEP 2Choose the Right Loan for YouTo determine which loan is right for you, ask yourself the following questions:What is the purpose of the new loan? (remove spouse, buyout, etc.)1194023224542●faster? etc.)How long do you expect to own this property?1253371120410●What is your risk tolerance for rate and/or payment adjustments on your new loan?If you aren’t sure – ASK. Your mortgage advisor’s primary responsibility is making sure that the product and terms you select are in line with your goals and needs.STEP 3Lock Your Rate7038321395648705954367384703649614219A rate lock is important because it protects you from rising yields. An unlocked loan709039102864longer your rate is locked - the higher the associated cost. Generally speaking, most loans close between 30-45 days depending on the lender.742349223789708038470616STEP 4Order AppraisalThe reality about appraisals is that every loan needs one. In fact, every lender needs their own appraisal report generated from their own appraisal management company. These reports are not transferrable between lenders, so be sure to select the lender you want to apply with before paying for and proceeding with any appraisal orders.STEP 5Underwriting Review7036561107200By this point, you’ve provided your mortgage advisor with all the necessary paperwork (see section on Document Requirements). Your completed loan application and appraisal will be forwarded to an underwriter to be reviewed. The underwriter is going to look carefully at each of the documents that you provided to determine yourthe credit guidelines as set forth. Be prepared to provide additional documentation or explanations after the underwriter's review.STEP 6Review Loan Approval and Conditions7024111395479letter and a list of approval conditions (yes, one last round of paperwork). Approvalthrough your approval letter carefully to make sure that the loan terms approved by the underwriter match what you thought you were getting. Also, review your conditions to make sure that you can satisfy all of the underwriter’s requirements.STEP 9Fund and Record7059676433141STEP 7Clear to Close702995367406Once your conditions are reviewed and accepted by the underwriter your mortgageexpected closing costs and contains another overview of your loan terms. It is critically important to review the details carefully to ensure that there are no surprises at close. If you have questions about your preliminary closing statement, bring them to your advisors attention prior to sitting down at the closing table. If everything is good to go on the preliminary closing statement, you can select a formal signing date.STEP 8Signing7090351394228where and when the signing will occur. At the closing table, you will be asked for passport. Most signings last anywhere between 30-90 minutes.702398228535of-rescission period. If you decide to cancel, you need to contact your mortgage advisor prior to the expiration of the cancellation period.703656452468After the cancellation period expires, your lender will fund your loan. Proceeds willrecord your new mortgage and Deed of Trust with the County.We hope this helps shed some light onto an otherwise unclear process. If you’re ever in doubt, ask for help. Your mortgage advisor is your concierge.What NOT To DoMany people make decisions before and during the loan process that may jeopardize their loan approval. Here’s what not to do.4Don’t change your job4Don’t quit your job4Don’t move your bank accounts without the green light44Don’t open any new consumer credit accounts.4Don’t be late on any of your credit liabilities or charge excessively.4Don’t make large deposits into your bank accounts that you don’t want to explain or document.4Don’t co-sign on a loan for anyone.4Don’t fail to disclose any debts, obligations, or other pertinent information.4Don’t spend savings budgeted for your down payment or cash needed at closing.4Don’t forget to disclose child support or spousal support payments.709047259650funded and recorded.“What-If” AnalysisThere are several important stages to your divorce settlement process, and the initial stages are often the most critical. What you do earlyon in the process can set the table for success. Our job is to make sure you’re prepared.There is one service that every divorcing individual should be sure to take advantageof when looking to re?nance or purchase a new home:Enter, the “what-if” analysis.Of course, this will play a pivotal role in determining whether you can qualify.But what makes the “what-if” analysis SO valuable is that it gives you a simple, foolproof way of evaluating how the variables in your divorce settlement (income, debts, etc.) can directly impact your ability to get a new loan.This can help you answer the all-important question of how will spousal and/or childsupport a?ect your ability to qualify.We all know that divorce is a moving target, with negotiations and settlement discussions unfolding over a period of months - sometimes years.Our “what-if” analysis can quickly and easily be revised to re?ect proposed changesBy obtaining a “what-if” analysis early in the game, you will notice how much easier it is to prepare for changes as they are presented to you.20? Divorce Mortgage Advisorsto your settlement.Did You Know4A minimum of 6 months history of receipt for spousal and/or child support is required4Support needs minimum 3 years of continuance (i.e. can’t terminate within 3 years of loan closing)4Ex. If your child is 16 and child support terminates at age 18, none of it will count for income.4Child support can be grossed up by 25% - providing you with additional qualifying income!4With most payments and obligations, lenders enter this as a ‘debt’ when calculating your debt-to-income ratio. Spousal support is treated di?erently. It is entered as a reduction of income. Without getting overly technical - this substantially improves your ability to qualify.4Your Marital Settlement Agreement (MSA) and judgment doesn’t necessarily need to be ?nalized. Loans can be funded using an Memorandum of Understanding (MOU), or other simpler alternatives.51703185125005Documents Needed54980921951484Gathering documents can seem like a daunting task, but it doesn’t have to be—if you’re prepared.71136661420370999586102622? Divorce Mortgage AdvisorsThis is far from an exhaustive list. Lendersfrequently request additional documentation throughout the loan process. Give us a call and we can provide a more detailedFAQHow do you charge?697872286099Clients are often surprised to learn that they pay us nothing. We’re compensated bypossible.What stage in the process do you get involved?697340254961697866501781underwriting analysis as settlement negotiations unfold.I’m planning to buy out my spouse. What should I be thinking about?697345254964708045501783708047748606My spouse is keeping the house. Do I still need to contact you?697529286113Absolutely. Before you agree to a settlement, you should ensure ALL proposals areI am planning to buy a house down the road. What should I do to prepare?Agreements reached today can impact your ability to qualify in the future. We can review the MSA for any potential pitfalls and provide insight on how a lender may interpret various provisions.706394223344697344102866to approach us post-divorce only to learn that the support paid precludes them from qualifying.How do I get started?24? Divorce Mortgage AdvisorsSimply get in touch with us, and we’ll supply you with a short list of the information we need to assess your mortgage proposal. Then, we’ll provide an in-depth analysis detailing how much you qualify for and the sensitivity to key variables (e.g., support, debt restructuring, etc.).CONGRATS!If you’ve made it this far, you:Recognize what sets divorce mortgages apartHave a blueprint for the top reasons to re?nance in divorceKnow your options and loan typesUnderstand the importance of a “what-if” analysisHave a grasp on the documents you’ll need to gatherValue the importance of working with a Divorce Mortgage AdvisorDMA is here to help you every step of the way. Don’t hesitate to get in touch.26? Divorce Mortgage AdvisorsNotes70939665229ROSS GARCIA, CDLPFounder & BrokerRoss currently serves as Principal & Broker at PREI Capital Group, the2270888150152Professional (CDLP). He is well versed in navigating complex divorce706692200488valuable resource for family law attorneys and ?nance professionals as they evaluate their clients divorce settlement options.Ross’ strong relationships with lenders, coupled with his expertise in divorce, translates into negotiating leverage in securing loan approvals for his clients.Ross has recently been selected as a Member of the Forbes Finance Council.709396-16982JASON CROWLEY, CFA, CFP?, CDFA?Co-Founder & AdvisorAs Co-Founder & Advisor at Divorce Mortgage Advisors, Jason works with our clients and their attorneys to formulate creative strategies to complicated settlement issues. His primary focus is providing guidance on how to properly structure agreements to help clientsachieve their mortgage ?nancing objectives. Jason’s expertise facilitating the division of complex assets such as stock options, business and venture capital interests, and real estate investments enables us to bring a unique approach to divorce lending. In addition, Jason oversees the business development and strategic growth initiatives of our company.A leading authority in divorce ?nance, Jason has been featured in Forbes, Hu?ngton Post, and other major media outlets. Jason is a highly sought-after speaker and has testi?ed as an expert witness on various divorce ?nancial issues. He has the distinction of being one of the select few ?nancial professionals to hold the Chartered Financial Analyst (CFA), Certi?ed Financial Planner (CFP), and Certi?ed Divorce Financial Analyst (CDFA) credentials. Additionally, Jason has extensive training in family law speci?c Mediation and Collaborative Divorce. Notably, Jason was selected as a member of the Forbes Finance Council and was the former president of Collaborative Practice San Mateo County (CPSMC).095243381123423103664DIVORCE MORTGAGEA D V I S O R SWe Didn't Invent The Divorce Mortgage Industry. But We Reinvent It Everyday.GET INTOUCHdivoreemort info@650-293-0016All loans originated through PREI Capital Group, licensed by the California Departmentof Business Oversight, under the California Residential Mortgage Lending Act, DRELicense # 01896272. Divorce Mortgage Advisors is not a licensed loan originator in theState of CA. Visit for additional licensing information .Co. NMLS ID: 316795 I NMLS ID : 674733 ................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.