A divorcing couple asks, “Why do I need a divorce mortgage pro? All lenders are the same, right?” But I cannot accurately answer these questions without having the divorcing couple answer mine.
“Are you just interested in a loan or are you interested in the best housing outcome?” I ask them.
As a common discussion, this is a real world example of the struggle between transaction and service that a divorce mortgage pro sees every day. People have been conditioned to look at anything associated with mortgage as transactional, and from a cost standpoint, the service we provide gets shadowed over low cost.
Normal borrower expectations are that a lender will meet every need, want and desire regardless of their situation. Everyone wants to have it all, but unfortunately, economics can short circuit this. For the run of the mill loan, this usually works itself out, but during a divorce with its accompanied legal, financial and emotional considerations, the resolution is not so easy.
Luckily, the mortgage industry is adapting to meet the unique needs of divorce real estate and mortgage lending. Much like the financial industry where many advisors have shifted from a commission-based model to a fee-based model, the mortgage industry has seen the emergence of the fee-based divorce mortgage professional. In the same way as divorce mortgage professionals, the fee-based financial advisor separates from the specific product and focuses more on the client’s portfolio as a whole. The divorce professional focuses on the outcome for the client. In addition, they play a part in the entire divorce housing process with the goal of finding the best outcome for the couple, whether it involves a transaction or not.
Just to state that yes, hiring a divorce professional is a benefit is not specific enough. There are four major reasons that you should seriously consider a divorce mortgage pro.
1. Expertise Going Beyond Just The Transaction
A divorce mortgage advisor has the skills to coach you through the process. A deep specialization in divorce related matters and a robust toolkit will allow your professional to guide you beyond just the transaction. The advisor will have experience and certification in areas such as mediation, credit repair or real estate that allow for a more comprehensive plan and better coaching. While there are fantastic mortgage bankers and brokers available to take the application, gather documents and manage the loan milestones, many do not deal with the sufficient volume of divorce loans to help you. They can make mistakes that can complicate, delay and sometimes kill a deal.
2. Working Closely With You Through the Entire Divorce Mortgage Process
Lending is, generally, a commission-based business meaning that when mortgage bankers or brokers close a loan, they get paid. Their key to success and main incentive is to close as many deals as possible with the least amount of effort. Every hour a lender spends costs them money and reduces their profitability. Often, this conflicts with the loan process associated with a divorce. Many divorce lending situations can last six or more months in which a lender can log a lot of hours. Until the loan closes, these are uncompensated hours for the lender, who is pressured to maintain a certain minimum production. This is why you will often hear “call me when the divorce is final,” from many lenders. They simply do not have the bandwidth to work closely with you through the entire process.
A divorce mortgage pro, however, is compensated hourly. You are buying their time and expertise and thereby ensuring that they are fully committed to advising you and getting the best outcome. Nobody can work for free and paying the divorce mortgage professional for their time ensures that you get quality time with them.
3. Unfiltered, Honest Advice to Help You — Not the Bank
The mortgage industry has always had a lot of paperwork, but the housing crisis of 2008 created much more regulation. To avoid fees and other penalties, complying with regulations is one of the highest priorities for banks. Their policies are created to reduce or eliminate their risk. As you would expect, the policies generally inhibit mortgage bankers from giving advice, guidance or strategy beyond what is in the direct interest of the bank. This can limit lenders to the direct loan application, processing and closing. You need good advice, and many times, only a divorce mortgage advisor can provide it. Think of it this way, you are paying them for the ability to give you unfiltered and honest advice and consul.
4. More Value with Divorce Mortgage Professionals
Consumers often merge cost with value. Too often, they evaluate how much to spend on something without considering what they are actually getting out of it. This can be especially apparent when borrowers look at mortgage solely from a rate and bank fee perspective without consideration for anything else. Complexity means time, and for lending, time means money.
Since divorce mortgage advisors are often cross trained in other areas such as mediation or credit repair, they can fill other needs for divorcing couples. They can mediate or co-mediate the issues of the home, review offers from competing lenders and help determine the best deal. Plus, they can work with the lender that you choose to ensure that they properly interpret and apply lending guidelines (yes, many lenders screw this up). Divorce mortgage professionals can help you with your credit, increasing your score to help divorcing couples secure the best rate and terms. When evaluated on the full breadth of services offered and savings provided, the return on the investment typically justifies the cost of hiring a divorce mortgage advisor.
It is vitally important to know early in the divorce process what you want your end result to be. If you aren’t clear on this, the road there can take you in the wrong direction. Consulting with a divorce mortgage expert early in the process allows you to avoid pitfalls and be properly poised to achieve your goals. A home is often one of the largest marital assets which is why it is so crucial to fully analyze and know your options. Proper planning allows you to begin your post-divorce life free of the bill for costly mistakes.