Archive for January 2013
Divorce Is Tough. The Mortgage Doesn’t Have To Be.
By Mark Watson, Loan Officer, Guardian Mortgage Company, Inc.
www.guardianmortgageonline.com
This is a terrific article. It’s jam-packed with information that I am so happy to be able to share! I’ve added just a few comments in square brackets [].
If you are going through a divorce, you are probably exhausted by all the details and decisions that have to be made as the two of you separate. Even in the most amicable situations it can be very emotional. [Remember there are the 5 facets of divorce – social, emotional, legal, financial and functional – that all overlap. So it makes sense that in the midst of making the decisions required to divorce that you would experience a lot of emotions.]
There is usually a lot of discussion about the house as it usually represents the family’s largest asset. [Dealing with an asset would be an example of the financial facet of divorce. When dealing with the financial facet of divorce it’s best to remain primarily in a business mindset instead of an emotional one because you’ll be better able to make decisions you can live with for the long haul.]
While divorce is a tough process, resolving the mortgage doesn’t have to be. According to Mark Watson, Vice President of Guardian Mortgage Company in Plano, Texas, there are three things homeowners can do to make it easier on themselves:
- Make realistic decisions.
- Understand your loan options.
- Seek help.
Make Realistic Decisions.
In many divorces, the home is refinanced in the name of one of the spouses and any profit or losses are negotiated between the couple. Sometimes the home is sold, and sometimes there is a long-term agreement in place about the home. Occasionally, a house with no mortgage is given to one spouse as part of the divorce settlement.
“It makes no difference to the mortgage company whether or not the name changes on the mortgage,” notes Watson. “However, the spouse no longer living in the home usually does not want to be responsible for it. Plus, they may want some cash out of it.”
If your house is paid off, a quit claim deed can be an easy solution to home ownership in a divorce settlement and make your life after divorce easier.
If there is no mortgage on the home, and one spouse plans to keep it as part of the settlement, the process is simple. “The attorney prepares a quit-claim deed and records it as part of the divorce,” says Watson. “The home belongs to just one spouse from that point forward.”
Most homes have a mortgage, though. There are a number of questions that must be answered in order to pick the right process for your situation, but the most important is “which spouse can afford to keep the home after the divorce?” It is often the most difficult as there is often a lot of emotional attachment towards the house that may not have anything to do with the financial realities of the situation. [The best way to answer these questions is from a business-minded perspective. The “businesses” to be considered are the financial business of each spouse post-divorce as well as the business of raising happy, healthy children. In other words, you need to keep in mind what your life after divorce will really be like if you choose to keep the house.]
The spouse with primary custody of the children will often want to keep the home to provide a stable environment and to stay near school and friends.
“I often see couples where the wife isn’t working and hasn’t worked in years,” says Bruce Rayburn of The Rayburn Group of Ebby Halliday Realtors based in Plano, Texas. “This makes it very hard to qualify for a refinance. Even if both spouses were working at the time of the divorce, it doesn’t mean either spouse can afford the mortgage with only one salary.”
“Even getting child support is often not enough,” Rayburn adds.
Besides the amount of income required to qualify for a refinance, the source of the income makes a difference. “For conforming loans ($417,000 or less in most areas of Texas), alimony and child support cannot count towards qualifying income until there have been at least three months of steady payments. In addition, the paying spouse must be required by law to pay for at least three years after the closing date of the sale,” notes Watson.
“For FHA Loans, the requirement is six months of payment. Furthermore, if the amount of alimony or child support is greater than 30% of the borrower’s income, then a full year’s worth of reliable payments is required.”
[Regardless of where you live you need to know a lot about what the legalities and implications of keeping the house are as you make decisions that will impact your post-divorce lifestyle and residence.]
Understand Your Loan Options.
Many couples believe that they have to sell or refinance the home in order to finalize the divorce, which is not always the case. Sometimes sale or refinance of the home is delayed for months to years.
According to attorney Penny Phillips of Plano, Texas, many families with children want to keep the family home for them until they are older and/or in college. “In this case, one spouse will sometimes agree to wait to get the equity out of the house until after the children have left,” says Phillips.
In Texas, a lien can be placed on the house – called an Owelty Lien Agreement – such that one spouse will own the house, but the other will still retain rights to equity that was present in the house at the time of the divorce. This gives the first spouse the right to make improvements and to own the home, but the second spouse will get his or her share of the equity later when the kids are grown or the market improves or whatever reason the couple has chosen to wait.
“It is a win-win because the owner-spouse gets the benefit of all improvements and equity growth in the meantime, but the other spouse still gets the benefit of all the years of contributing to the equity when they were married,” adds Phillips.
“Since the home is not sold or refinanced, there is no need for the remaining spouse to get qualified for a new mortgage until the cash-out time. They just need to keep making timely payments. This is a good solution for situations where the divorce is fairly amicable and the spouses can work together for this common goal. I always advise that they tell the mortgage company about the divorce, however, as both partners need to continue to get notices about the loan,” says Phillips.
[Keep in mind that just because a divorce starts out amicably doesn’t mean it will stay that way. So making sure that both spouses continue to get notices about the loan is a smart decision. After all, keeping life after divorce amicable between exes requires regular, respectful communication, but tempers can still flare despite the best efforts.]
“We generally see Owelty Liens when a couple is in the process of refinancing the home,” notes Watson. “You don’t need to wait a specific amount of time to use it, and it has the added benefit of letting you do a “special purpose” refinance and go up to 95% of the appraised value of the home. This provides more equity at the end of the process.
“Current “cash-out” guidelines for refinancing in Texas allow for financing up to 80% of the loan value. A special purpose refinance allows you to get an extra 15% out of the home, which is then shared between the couple as per the terms of their divorce. I always talk to my clients about Owelty Liens because it can make a big difference if one partner is trying to buy another home, for example. Also, if the other partner finds out after the fact that they could have gotten more cash out of the refinance and didn’t, it can cause more unhappiness all around.”
Seek Help.
Dividing up the marriage assets is emotional and financially risky if you are not sure what you are doing. Early in the divorce, both spouses should consult their mortgage provider, realtor and CPA as well as an attorney in order to review their options and the financial and tax consequences of certain decisions. These objective outsiders will help you navigate your particular situation and direct you to other resources. In addition, they can act as a go-between if the divorce is contentious.
[One other divorce professional you may want to contact when dealing with the financial questions of divorce is a Certified Divorce Financial Analyst. These professionals are trained in how to help couples develop different scenarios for an equitable division of their assets and debts so they’ll each have a better picture of what their financial life after divorce will be like.]
“It is a false economy to do a divorce yourself. I’ve seen couples ruin their credit by doing it wrong. In one case, so many mistakes were made; one partner almost went to jail. It’s not worth it,” said Phillips. “Plus the experts can tell you about Owelty Liens and other ways to get the best out of a bad situation.”
“Lack of communication makes the divorce harder,” says Rayburn. “I often will work with both spouses in a divorce to help sell the old home, refinance and/or find a new, less expensive home if that is their post-divorce reality. I’ve even helped people through multiple relationships over the years because I was able to facilitate communications between the parties.”
“I often give my clients a list of good appraisers to call on,” says Watson. “Even if they don’t plan to sell or refinance right away, they need an appraisal in order to fairly determine the value of the home for the divorce settlement. I can then take that appraisal and show them how much equity is in the house so they can have more meaningful discussions.”
As with most issues related to divorce, there is no single best way to handle your mortgage. Divorcing couples must take a long look at their finances, and make realistic decisions based on a thorough understanding of their options.
Have more questions about how to handle your mortgage through divorce? Contact an experienced loan officer like Mark Watson at Guardian Mortgage Company today about your specific situation. Guardian Mortgage Company has been serving North Texas since 1965. Mark Watson (214) 473-7954.
Your Life After Divorce Assignment:
If you’re at the point of trying to decide what to do with the marital home, focus on the business decision you need to make. Despite how much you are attached to your home, the fact is it’s just a thing, a place. Spending your energy deciding how to best deal with this marital asset instead of what it represents will help you come to the best decision for you – the decision that you’ll be most comfortable with financially and emotionally in the long haul.
If it’s difficult for you to separate the business aspect of this decision from the emotional one, give me a call at 817-993-0561 so we can schedule a Complimentary Consultation and together we’ll figure out a way for you to have an easier time making the decisions you need to make as part of your divorce and make your life after divorce as good as it can be.
You don’t have to go through this alone. I’m Dr. Karen Finn, a divorce coach and advisor. I understand what you’re going through because I’ve been through it too. I’ve been helping people just like you who are dealing with all the stress and pain of divorce since 2007. You can join my anonymous newsletter list for free weekly advice or email me directly for a free consultation at Karen@functionaldivorce.com.
Are you looking for more tips about setting yourself up for your best possible post-divorce life? You can find more great information at Life After Divorce.
All Tangled Up?
Have you ever felt all tangled up on the inside and didn’t know which direction to turn?
Or maybe you’ve felt that you’re stuck in quicksand and it’s taking all your effort to just make it through each day?
Or worse, you’ve felt that you’re wearing a choke-chain of all your responsibilities and don’t really know who you are anymore?
Don’t worry. I’ve been there. In fact, everyone I know who has been through divorce has been there before too. Overwhelm can be hard to overcome and yet it’s a common part of divorce. Knowing how to get through it or stop it all together is a critical skill to develop. What I’m going to share with you today are some of the techniques I regularly use with myself, my family and my clients when things start to feel overwhelming.
1. Change your story.
When I was finding my way through the aftermath of my divorce, I used to tell myself really scary stories. They were stories of doom and I told them over and over again – like a broken recording. I was feeling overwhelmed and the stories I told myself made things worse. I didn’t see any way that I could ever stop the chaos I was living in. I felt like I was performing and not really living. I was really miserable!
But, things slowly changed when I started changing my internal story. Instead of envisioning a life of doom and destruction, my stories became more about experiencing sadness and then more about being tired of the sadness and imagining what changes I could make. And then, I started actually making changes – some really big changes. I started living again instead of feeling like a prisoner of circumstances.
It can be the same for you. Simply by changing the story you’re telling yourself, you can dramatically (even if it takes time like it did for me) change your life for the better and stop feeling overwhelmed.
2. Take care of you first.
For those of us who have a tendency to get burned out, when we feel stressed about out divorce it can be especially easy to forget about taking care of ourselves and just focus on what needs to be done for others instead. After all, they’re depending on us, right?
It’s easy for me to identify a new client who isn’t taking care of themselves because they have a difficult time answering questions like
- Are you getting enough sleep?
- Are you exercising?
- Are you eating nutritious meals?
in the affirmative. They’ll squirm a bit before answering or try to deflect the question with a joke or some explanation as to why they can’t sleep or exercise or eat well.
If you can’t honestly say you’re getting enough sleep, adequate exercise and eating well, you would probably benefit from taking better care of yourself. Taking care of yourself isn’t an afterthought – something you do after you take care of the rest of your responsibilities. Taking care of yourself is VITAL to you being able to take care of your responsibilities. Without your physical well-being, you won’t be able to take care of anyone or anything else, so, please, make sure you’re putting you first and treating yourself well.
3. See the lighter side and laugh.
Somehow, when things are really miserable and you’re just not sure how you’re going to deal with one more pressure, there comes a moment when you realize just how ridiculous everything is – all the pressure and stress suddenly become laughable. I’ve found the best thing to do when I reach that point is to laugh. I’m not talking about a simple tee-hee-hee or chuckle, I’m talking about a really deep from the gut laugh.
Laughter is a great cure for stress and overwhelm. It causes you to loosen some muscles and tighten others. It requires you to breathe differently and it gets some different hormones flowing through your body – the kinds that help you to feel better.
In working with my clients, I often incorporate really bad jokes to get some laughter going. Laughing always lightens the mood and allows my clients to see things from a slightly different angle and break the strangle hold overwhelm had on them.
With overwhelm and stress being such common elements of our daily lives – not to mention divorce, these 3 simple ideas can be a great springboard for you to prevent yourself from succumbing to burn out.
Your Functional Divorce Coaching Assignment:
The next time you’re feeling stressed out, pick one of the 3 suggestions above and try it out. After all what have you got to lose besides your stress? I know that if you consistently take the necessary steps to help you deal with the stress of your divorce, you’ll be better able to manage it.
I’m Dr. Karen Finn, a divorce coach and advisor helping people just like you who are dealing with the stress and pain of divorce. You can join my newsletter list for free weekly advice. And if you’re interested in taking the first step toward working with me, you can schedule an introductory private coaching session.
© 2013 Karen Finn. All rights reserved under all copyright conventions.
Just finished a great book – Raising the Kid You Love with the Ex You Hate
Edward Farber, PhD is releasing his new book Raising the Kid You Love with the Ex You Hate next week. I was lucky enough to receive an Advance Reviewer’s Copy and I do mean lucky.
Ed’s book is full of fabulous advice about how to make the business of co-parenting work after the business of marriage has failed. The basis of his advice about successful co-parenting hinges on these three principles:
- Your child needs both parents
- Reduce parental conflict after the separation
- Both parents make decisions
Parents who can agree to abide by these three principles will have a headstart in helping their children be happy, healthy adults. To be implemented well, each parent needs to be consistently focused on them and communicate regularly with their ex to make sure they’re on the same page. Continuing to interact with your ex after divorce may not be something you look forward to, but, as Dr Farber points out, it’s necessary to being able to raise the kid you love.
I really appreciated reading this no non-sense approach to making co-parenting work along with the real-life stories from Ed’s practice, but probably the best part of this book is the fact that he shares ideas for non-ideal co-parenting situations. He offers suggestions for dealing with an ex who is more interested in revenge than in successfully co-parenting, for how the co-parenting arrangement will naturally need to change as your kid grows older, for dealing with an ex who has emotional, psychological or addictive disorders, and even for dealing with kids who may be embellishing the truth to get into your good graces.
This book is an ideal resource for parents who are divorced or divorcing and committed to continuing to be great parents.
You can check out the book at Raising the Kid You Love with the Ex You Hate.
I’m Dr. Karen Finn, a divorce coach and advisor helping people just like you who are dealing with the stress and pain of divorce. You can join my newsletter list for free weekly advice. If you’re interested in taking the first step toward working with me, you can schedule an introductory private coaching session.
If you’re looking for more help on how to navigate the challenges of your life now, read more articles on Life After Divorce.
Have A Great Online Dating Experience
Dating after divorce can be confusing. After all, it’s probably been a while since you last dated and things have CHANGED since then.
One of the biggest changes in dating over the last 10-15 years is the number of people who use online dating services. Did you know there are even websites dedicated to letting you know who the top online dating services are? These services are a BIG business and it’s OK to use them. When my clients decide to start dating, most of them use an online dating service or two. Heck I even used one to meet my 2nd (and current) husband.
Online dating, just like any other kind of dating, is terrific IF you’re aware of these three pitfalls.
The first pitfall is lack of safety. I’ve heard stories from both men and women about some positively scary situations they found themselves in when they met a date. Here are some key things you can do to be a bit safer when you date online:
When you’re using an online dating service, be careful of your identity. Don’t use your full name on your profile that’s open to the public.
Ask the other person for their number, don’t freely give yours away. It’s OK to block your number and make your first call(s) anonymously.
For heaven’s sake, DON’T give someone you’ve never met your address to come pick you up. When you’re ready to meet someone, arrange to meet them someplace public. Park someplace where there are lots of others coming and going. It’s also a good idea to let someone know someone know where you are going to be meeting your date and have them call if they haven’t heard from you in a couple of hours.
The second pitfall is looking for a spouse instead of learning to date. One of the most common things I see people do when they’re starting to date again is to focus on finding a spouse instead of focusing on dating. There’s a big difference between the two!
When you focus on finding a spouse, going out becomes a lot more serious, a lot more intense. You might even start to worry about how many dates you go on before you decide if you want to be serious with this person. Sometimes you don’t go out with more than one person at a time because you want to make sure you give the current person the benefit of the doubt.
When you’re focused on dating, the whole thing is a bit more casual. There’s less stress and pressure to impress and more emphasis on figuring out whether or not you’re enjoying yourself. Focusing on dating is a great way to learn what you do and don’t like about others and yourself when you’re around them. This knowledge will allow you to move on when it’s right for you. One important point here is that you need to be up-front with the people you’re dating to let them know where you’re coming from and so they don’t get the wrong idea about your intentions.
The third pitfall is thinking you must respond and/or date everyone who contacts you. You have no responsibility to the people who reach out to you. You don’t have to respond to everyone and you definitely don’t have to go out with all of them either. You deserve to be picky about who you spend your time on and with. Your time and how you spend it is how you create your life, so be picky about whom you spend time with!
I want you to think of dating as cultivating friends and learning about yourself. Most people aren’t ready to get into another serious relationship right after they get divorced. They need some time to rediscover themselves and figure out what they do and don’t like about other people. That means going out with other people to have fun.
Dating is supposed to be fun and using the online services can be a great way to meet some amazing people. Just be sure to avoid the pitfalls!
Your Online Dating Assignment:
Do some research. There really are a lot of sites out there to help you meet people to date. Each site has its own personality. Check out a few and decide which site or sites best fit you.
Be open to learning about yourself. The dating experience should be fun and put you and your date in new situations that will allow you both to learn about yourselves and each other. Successful dating requires that you be ready to learn stuff about yourself without the expectation that you or your date be perfect.
Are you ready to date? OK, this probably should have been the first step of the assignment, but I saved it to last so you’d be sure to see it. There’s no rule about when you’re ready to date, but generally, you want to be through the worst of the emotional part of your divorce. If you’re curious to know where you are on the continuum of being through with the emotional part of your divorce you need to check out the Fisher Divorce Adjustment Scale (FDAS) at http://drkarenfinn.com/work-with-me/how-long-does-it-take-to-recover-from-divorce
I’m Dr. Karen Finn, a divorce coach and advisor helping people just like you who are dealing with the stress and pain of divorce. You can join my newsletter list for free weekly advice. If you’re interested in taking the first step toward working with me, you can schedule an introductory private coaching session.
If you’re looking for more help on how to deal with your life now, read more articles about Life After Divorce.
Step 1 For Finding Me-Time In Your Busy Day: Set Timer For 5 Minutes
Isn’t it easy to get caught up in everything that’s going on and demanding our attention? There’s work, our family and friends, our community activities, our health, chores, TV and the internet. PLUS the divorce! It’s all clamoring for attention RIGHT NOW! Wouldn’t it be great to be able to stop the world for a moment and regroup?
Well, stopping the world for just a moment is EXACTLY what I believe you should get in the habit of doing every day. Sounds like a dream, right? OK, so no one can truly stop the world, but you can certainly stop participating in everything for just a few minutes every day. My recommendation is that you take at least 5 minutes every day for “me time”.
The benefits of regular me-time are amazing! They include a reduction in stress, the ability to think more clearly, seeing the “big picture”, and increased energy.
Here’s what you’ll need to be able to stop the world and get your own “me time”: a timer, a comfortable place to sit, and an agreement with everyone else that you are not to be disturbed for 5 minutes.
Step 1: set timer for 5 minutes. Yes, seriously! Set the timer so you can relax knowing you won’t lose track of time.
Step 2: Get comfortable where you’re sitting and close your eyes. Grab a pillow. Curl your legs up underneath you. Pull a blanket over you so you feel cozy. Do whatever you need to do to feel comfortable.
Step 3: Take a deep breath in, hold it for a second and then s-l-o-w-l-y exhale. Notice that while you are exhaling, your shoulders loosen up a bit. Keeping your eyes closed; continue your deep breathing until the timer sounds.
Step 4: Slowly open your eyes, when the timer sounds. Wiggle your fingers and toes. Let yourself re-orient to your surroundings and enjoy how relaxed you’re feeling. Now, go ahead and turn off the timer and let the world start up again.
Your Friendly Coaching Assignment:
Schedule 5 minutes of me-time in the next 24 hours. I find that most people are so used to doing what they believe has to be done for everyone else, that it can be hard to find even 5 minutes to take care of themselves. That’s why this step is so important. Decide when you have 5 minutes that you can dedicate to taking care of you and schedule it into your day.
Keep your appointment with yourself. In order for you to get the benefits of your me-time, you’ve actually got to do it. So, once you get the time scheduled, take the 5 minutes to recharge. I bet you’ll be happy you did!
Do it! The more consistently you give yourself the gift of me-time the easier you’ll find it is to handle all the twists and turns and demands for attention that pop up in your life.
If you’d like more do-able ideas for creating more me-time in your life, give me a call at 817-993-0561 so we can schedule a Complimentary Consultation and together we’ll figure out a way for you to have more me-time.
I’m Dr. Karen Finn, a divorce and personal life coach helping people just like you who are dealing with the stress and pain of divorce. You can join my newsletter list for free weekly advice or schedule a private consultation with me.
A Divorce Party?
We do a lot of celebrating to commemorate important milestones in life. We celebrate births with birthdays. We celebrate completion of educational milestones with graduations. We celebrate marriages with weddings and showers and engagement parties. We even celebrate a person’s life after their gone with funerals and memorial services.
We have these celebrations to acknowledge the completion of one thing and the beginning of another. Everyone knows how to help the person who has achieved the milestone to move on to the next phase of their life because of our societal training.
But what about divorce? Divorce is an important milestone for almost half of married couples and we don’t know how to deal with it as a society. This lack of societal acknowledgement of divorce and a knowledge of how to help the person who has reached this milestone makes the transition from divorced to married all the more difficult for many people.
If we take our cues from TV and the movies, when people get divorced they need to hate each other for the rest of their lives and that the legal part of divorce will be extremely contentious and have to be heard by a jury. In reality, this is rarely the case. Sure divorce hurts – it hurts a lot, but it doesn’t have to ruin the rest of your life by having to expend all that energy and time hating your ex.
Divorce is a relatively short phase of life for most people. It’s a transition point just like a birthday, completing high school, having children and getting married. After the transition, your life is different – usually better. Because divorce is a transition just like so many others in life, why not have a divorce party?
A divorce party can be a happy or a somber occasion. Heck, it can be anything you’d like.
I know some people who commemorate their divorce with a divorce party much like a wedding shower. Their friends get together and bring gifts that will help them set up a new household for themselves.
Other people mark their divorce with a great big celebration.
You might choose to celebrate your divorce with something more low key. Getting together with some friends and talk about the good times that were and the better times that are coming.
Or maybe holding a funeral for the marriage will help you with the grief that is a natural part of divorce.
You might even choose to flush a toilet for your divorce like some people in Japan do. (I’m not kidding! – here’s a link to the article that claims people in Japan have a toilet for divorce)
There are all kinds of different ways you can welcome in the new phase of your life – being re-singled. It might be with a celebration or with a more somber acknowledgement. It might even be with a series of events for each milestone you achieve during your divorce process. Whether you choose one event or many doesn’t matter as much as what each event represents to you – which I hope is a new beginning.
Your Functional Divorce Assignment:
What phase of your transition from married to re-singled are you needing to commemorate? There are all kinds of things, big and little, that can be acknowledged during divorce – filing the initial paperwork, moving out, your first weekend without the kids, your first date. What’s going on for you that you need to mark as a new beginning?
Which of the article’s suggestions for celebrating the next phase of your life sound best to you? Choosing one of the suggestions is only the starting point. You can change things up to be exactly what you need.
Schedule your event and send out the invitations. An event isn’t really an event if you’re having it all by yourself. Invite the people who will help you move forward to the next phase of your life.
I’m Dr. Karen Finn, a divorce and personal life coach helping people just like you who are dealing with the stress and pain of divorce. You can join my newsletter list for free weekly advice or schedule a private consultation with me.