• Home
  • Contact
  • Blog
  • AIO
  • Divorce
  • Home
  • Contact
  • Blog
  • AIO
  • Divorce
PATHWAY
  • Home
  • Contact
  • Blog
  • AIO
  • Divorce

Jeff L. Weaver, CDLP, RSC-d
Senior Loan Officer
NMLS 403726

    Author

    With over a decade of experience in the mortgage industry, Jeff can help you explore the options available to you, so you can make the most informed decision about what is best for you and your family. Financing Real Estate is serious business and no one understands that more than Jeff.

    Jeff and his team of real estate experts provide all the tools you need to achieve your real estate goals. Jeff is committed to providing superior service to his clients. That's why he takes the time to get to know his clients' needs, and then helps them achieve their goals. He has extensive experience in the real estate and mortgage market and offers suggestions and solutions that work. His team of experts can help you take care of any real estate needs you may have during and after the transaction. That's why many of Jeff's satisfied clients refer him to their friends and family.

    Jeff Weaver's mission is to provide his clients and customers with a world-class real estate experience. Refinancing, buying or selling a home is the largest business transaction most of us will ever make and it can be a very complex and time-consuming experience. However, with Jeff, he makes certain that his clients will come away completely satisfied and stress free.

    Jeff is dedicated to his clients and customers and his greatest compliment is when his clients and customers refer him to their friends, family members and co-workers. Jeff is a graduate of Millersville University and lives in Exton with his wife Melissa and son Jackson.

    Archives

    January 2021
    December 2020
    November 2020
    October 2020
    April 2019
    January 2019
    November 2018
    October 2018

    Categories

    All

    RSS Feed

Back to Blog

How to work with Property Settlement Notes in a Divorce with Mortgage Financing

11/27/2018

 
Property Settlement Note – a deferred payment in property settlement used to equalize property.

  • Used to equalize property distribution in a divorce
  • Income from the note is not taxable to the recipient although interest is
  • Only survives bankruptcy in certain situations

When divorcing couples negotiate the terms and conditions of a property settlement, they agree to a structured settlement, which is a series of smaller payments paid over time, as opposed to a lump-sum payment. In this routine, a series of payments over a period of time comes to more than the agreed upon settlement sum because the recipient normally receives interest to compensate for the delayed payment.


A property settlement note is not taxable to the recipient because the IRS says that the transfer of property in a marriage is not taxable and in this scenario, the property settlement note is still a division of property. However, any interest earned and paid as a term of the property settlement note is taxable income.
Important Note regarding income from property settlement note

Income from a property settlement note is not always considered ‘qualifying income’ for mortgage qualifying purposes and if the income from the property settlement note is needed for qualification then it is important for you to consult with a mortgage professional who understands divorce guidelines because you want to make sure that future financing plans are achievable.


Working with a Property Settlement Note & Mortgage Financing
Often misunderstood mortgage guidelines are the reason for mortgage applications being denied and creating the misconception that mortgage financing is extremely hard to obtain. Working with a knowledgeable mortgage professional who understands how divorce situations transfer over into mortgage guidelines is key for setting your divorcing clients up for success post divorce. Understanding that various sources of income have varying requirements in order to be considered as ‘qualified income’ is another key component. Let’s take income from a property settlement note as an example.

There are two standard requirements that need to be met in order for income from a Property Settlement Note to be used for mortgage qualifying purposes:
  • A copy of the note showing payment terms and proof of continuance for 36 months from the date of application.
  • Proof of receipt of payment for the most recent one year (12 months).

To further discuss how to utilize income from a property settlement note when obtaining mortgage financing please don't hesitate to reach out.

0 Comments
read more



Leave a Reply.

Proudly powered by Weebly