#1109 Divorce and the Family Home: What You Need to Know

In this conversation, Jon Sanchez (Sanchez Gaunt Capital Management), Cory Edge (Edge Realty) and Dwight Millard (Highlands Mortgage) discuss the complexities of navigating divorce, particularly focusing on the implications for home ownership and financial planning.

They explore various options for dealing with the family home, including selling, buying out a spouse, or co-owning temporarily. The emotional and financial impacts of divorce are highlighted, along with the importance of understanding home value, protecting credit, and planning for future housing needs. The conversation emphasizes the necessity of involving professionals such as realtors, financial advisors, and attorneys to ensure a smoother process during this challenging time.

Chapters
00:00 Introduction and Market Overview
00:55 Navigating Divorce and Home Ownership
08:25 Understanding Property Ownership in Divorce
19:41 Determining the Home's True Value
24:08 The Importance of Donor Contributions
29:19 Navigating Divorce: Understanding Home Value and Ownership Options
37:55 Protecting Credit and Future Housing Needs
44:27 Involving Professionals in Divorce Planning



👉 Watch this episode on YouTube: www.youtube.com/@thejonsanchezshow
👉 To learn more about retirement planning and wealth management in Reno, visit: sanchezgaunt.com

Compliance Disclosure: This program is for informational purposes only and should not be considered investment, tax, or legal advice. The views expressed are those of the participants and may not reflect the views of Sanchez Gaunt Capital Management. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Always consult with a qualified financial professional regarding your individual situation before making financial decisions.

Episode Transcript

Speaker 1 (00:02):
So I have a question.

Speaker 2 (00:05):
Good Tuesday afternoon to you. Welcome to the John Sanchez
Show on Newstalk seven eighty K. It's a pleasure to
be with you and a pleasure to be with my
co host around the horn. We shall travel. Let us
go to mister Cordy.

Speaker 3 (00:15):
How you doing, big c I'm doing great? How are you?

Speaker 2 (00:18):
Fantastic? Thank you? It may not be right, record setting
day on the dell?

Speaker 4 (00:22):
You know?

Speaker 2 (00:23):
Things looking good?

Speaker 3 (00:24):
Man?

Speaker 1 (00:24):
Hey, where's my queue? Another record setting day? Right?

Speaker 2 (00:29):
Oh, that's true. I failed that one. I feeled that one.
Do I have Millard Hiland's mortgage?

Speaker 3 (00:35):
Do I?

Speaker 2 (00:35):
What kind of day was it today?

Speaker 1 (00:36):
Another record setting day?

Speaker 4 (00:37):
John? Go?

Speaker 2 (00:38):
Yeah, there you go. That's it. How are you, my friend?

Speaker 1 (00:42):
Like? I'm doing fantastic? Loving these rates?

Speaker 2 (00:45):
There you go, there you go, and we will definitely
be telling you what those rates are after we, of course,
get through the stock market side of things. Well, welcome fellas,
Welcome everybody. We appreciate you joining us. Let me tell
you what we have lined up for you this afternoon.
After the stock market recap and going through the commodity
and so on and so forth, we're gonna talk about
something that's never easy to talk about, but unfortunately it's

(01:05):
a reality of life, and that is divorce. Right. Divorce
never ever easy. It's emotionally difficult, it's obviously financially difficult,
and for many couples, the biggest question is what happens
to the home, right, it's for most people their biggest
if not you know, right at the top of assets, right,

(01:26):
one of the major assets they have. So what are
your choices? Do you sell it? Do you keep it?
Do you buy out your spouse? You have all these
different options in front of you. Well, today, what we're
going to be doing is we're going to be breaking
down what your real options are, the financial traps to
avoid and some very smart moves that the boys will
put together to protect the equity, the credit and the

(01:48):
future wealth after a divorce. It's a tough subject, guys,
but you know is many of us know that after
you know, roughly fifty percent of marriages, unfortunately and in divorce,
we are seeing a trend moving a bit higher. As
far as they call it the what is it, Corey
call the gray divorce or the grain that term that

(02:09):
we used a while back where people you know, later
in life like in their six season things, they're getting
a divorce and what prompted me to kind of bring
the subject up. There was a very interesting article I
thought about you, Corey in the Wall Street Journal yesterday
talking about how, you know, people in their retirement years,
let's just call it, that are single, whether it's through

(02:30):
you know, the loss of a spouse or again a divorce,
what many of them are doing. They're like, I don't
want to sell my house because maybe it's paid off,
or they enjoy where they live. So what they're doing
is they're bringing in we'll call it roommates, right, people
of their same age, same generation, and they're coming in
and renting a house from them, and they're raving about

(02:50):
how successful they are. They say, look it not only
do I get a little bit of extra income coming in,
but most importantly, I'm not lonely anymore. Right, I read
one person they brought in two roommates. Right, you never
talk about roommates and kind of the grain, you know,
generation to bring in roommates. But this seems to be
a new trend. They said, that's beginning to develop. And

(03:13):
then I thought, well, okay, this could be a situation
where unfortunately if you have a divorce and you do
end up keeping that house. You know, obviously we've done
a number of shows on renting out a room or
some other ways to offset some of that mortgage payment.
But you know, again that's a subject for another show.
But I thought that was interesting. But once again, here
we have the situation with the house. It's going to

(03:33):
be a major contention and a divorce, and especially if
you have a lot of equity in there, and we're
going to lay out some very important steps that you
need to consider if indeed this happens. Corey, how often,
you know, say, out of a year, how many how
many transactions do you get involved with do you think
that that are involve a divorce?

Speaker 3 (03:49):
Man? It really varies. I mean we we kind of
talked a little bit on the show, just briefly about
Richard Lace and kind of what he's doing, and he
does a lot more of these I do, because a
lot of times they're just trying to determine a value
and then by the time I get involved, the decision
has been made and now we're going to sell it,
which is kind of the final step. But a lot
of people go through the valuing process prior to that,

(04:11):
So I'd say ten to fifteen, ten to twelve somewhere
in there, depending on COVID was big, Like a lot
of people figured out during COVID, I love you or
I hate you, like we've been together, you know, non
stuff for a year, so let's figure this thing out.
But no, I'd say ten to twelve in my I'm
I'm sure there's a lot more than that.

Speaker 2 (04:30):
But yes, yes, exactly. What's what's probably one of your
biggest takeaways? You know, dealing with this a lot from
a from a realator standpoint.

Speaker 3 (04:40):
So by a lot of my stuff comes via the
divorce attorneys, right. I have a lot of clients and
friends that are attorneys. So usually what will happen is
they'll go in the two couple or the couple will
go in. They all have their favorite realtor or their
attorneys have their favorite realtor. So either the judge has
to approve or both sides find agree on somebody. But

(05:02):
when I do get people that haven't been to that
step yet, the first thing I always tell him, I
was just talking to a client about this last week. Unfortunately,
you got to remember, you know, want to get the
emotions aside and all that stuff. Easy for me to say,
but you got to get that in line. And remember
that most houses are owned fifty to fifty. You own
just as much as she does, or you own just
as much as he does. So one one spouse's decision

(05:22):
isn't more important than the other spouse. It's a fifty
to fifty thing. Now, I will tell you I've had before.
I had won a couple of years ago where unfortunately
my client, my friend, was the wife, and she thought
it was fifty to fifty this and that. Well, no,
it was bought in the husband's trust on his own,
that was gifted to him from her. Like, So the

(05:44):
first thing, make sure who owns the house and what
owns the house and what entity, and then figure out
from there. Because I have seen over the years and
a few surprises where people are like, oh, dang, I
don't even own any of this, and now we've got
a big problem here.

Speaker 2 (05:58):
And especially when you come to this similar to that situation.
But when you come to the marriage already owning the house. Right,
let's say that the guy owned it before they got married,
and she thinks and he never editor to the title.
That creates a whole another set of dilemmas there.

Speaker 3 (06:11):
Well, you get into it. And again, my client was
talking to last week. You know, they had put in
some I don't want to get too many details out,
but there was some inheritance money that went into the house.
And so then the question becomes, well, wait a minute,
I didn't have to do that, but you did. So
the court will cause some of that back to that
person's favor, and so there's all kinds of weird stuff
that happens.

Speaker 2 (06:32):
Absolutely. What kind of experience do you have in that area.

Speaker 4 (06:36):
Well, I mean I got plenty here, John, and I
have thrown there, but from a from a fortunate or unfortunate.
But you know, currently I'm not seeing a lot of
divorce transactions.

Speaker 1 (06:48):
You know, hey, we're getting splitting it up.

Speaker 4 (06:49):
But I do see John, I would say I got
to say eighty percent. If not, maybe it's seventy percent.
So seven out of ten are blended families. It's new,
it's new partners come together. I mean, it's it's you know,
maybe they've been married or you know, for a while,
but yeah, it's it's not the original rodeo.

Speaker 1 (07:07):
I don't think in most cases.

Speaker 4 (07:09):
So I am doing that, and which gets a little
more complicated there too, because then if there is a
property owned out here and things like that, it's you know,
it's it's not it's not as straightforward as.

Speaker 1 (07:18):
It used to be.

Speaker 2 (07:19):
Yeah, no, not at all, and especially right worry if
you're talking someone with with multiple properties. Right, we're focusing
this afternoon just on the primary residence, but you started
adding in, you know, one or two rentals, if not more,
and then get even more messy than you're talking LLCs.
Who wants the ll cs?

Speaker 3 (07:34):
And well, and there's all kinds of spousal writers in
the LLCs. Sometimes, as crazy as it sounds, sometimes if
you have multiple properties, it's a little easier because if
one spouse needs cash or one one's properties, you can
div them up and then that person can sell what
they want to while the other.

Speaker 2 (07:49):
Half it's equal.

Speaker 3 (07:51):
No I know, but I do have And maybe I'm
getting too far along. I'm curious right when we start
talking about this, if you get a couple in there
and they're newly married, but somebody had gone through a
divorce and their old spouse is still in the mortgage, Like,
is that person hit with the full hold mortgage payment?

(08:12):
Or half of the old mortgage, Like there's all these dynamics.

Speaker 1 (08:15):
Yeah.

Speaker 4 (08:15):
No, And that's a great question because unless I can
prove if he's still on the property. I mean a
lot of times they do a quick claim, right, Corey,
they were told to do a quick claim.

Speaker 1 (08:23):
They're still liable, which means nothing. Yeah, it means nothing.

Speaker 4 (08:26):
As long as I can verify twelve months of payment inconsecutively,
I can eliminate that debt from that. But most of
the time there's not twelve months or that there was
a oh I paid half of it, you know in June.

Speaker 1 (08:40):
Well now it's a problem. So yeah, so I have
to factor that in to that.

Speaker 4 (08:45):
And that doesn't make the other spouse happy when I
say I'm not sure I can get this because you've
got this debt over here.

Speaker 1 (08:52):
So sure, you've got to kind of know all that.

Speaker 2 (08:54):
Yeah, So there's a lot of moving parts, and we're gonna,
like I said, we're gonna try to simplify it for
any of you that are going through this unfortunate life
event or maybe in the future. But better to know
ahead of time than you know when you're in the
midst of it, to say the least, all right, guys. Well,
we'll get to that here momentary. As I said, first
of all, let's go to the stock market side of things.
Is Dwight so correctly mentioned it was a record setting day,

(09:15):
at least on the Dow Jones Industrial average side of things.
Obviously no economic reports. We are expected, believe it or not.
You've heard me say this on the stock updates. We
are expecting to get the CPI report, I believe on Friday.
Even though the government, you know, assuming this still shut down,
they still said they're going to release that. So we'll see,
you know, kind of impact that has and what the

(09:36):
number looks like at that point. But in the meantime,
we're in the heart of earning season, right, this is
what's driving everything. Had some really good earnings reports this
morning that kind of set the tail. And some of
these earnings reports I'm mentioning our Dow components. So that's
why the Dow did did well and close the record area.
Thought we I mean, we came close. We had a
high today of forty seven five. I was hoping I

(09:57):
was gonna be able to come on the show guys
and say, hey, we closed at Dow forty seven thousand,
something because obviously that is a major major milestone to
close about forty seven thousand, But we came closed forty
six nine to twenty four. That was a two to
eighteen gain on the dow. Now as that lost thirty six,
the SMP actually finished unchanged on the day. The drivers
inside the dow. Well, first of all, is Coca Cola.
A lot of people drinking soft drinks these days. Up

(10:19):
four point zero six percent two dollars and seventy eight
cent gain, seventy one twenty two better than expected numbers,
three M Dow component I'll eleven dollars in eighty six cent,
seven point six seven percent wins sixty six sixty four. Again,
that was a company that also reported better than expected.
RTX formerly Raytheon reached an all time high after they
beat and they raised their earnings report. Stock shot up

(10:40):
twelve dollars and thirty three cents seven point six seven
percent to win seventy three oh four. Let's see at
General Motors. Surprisingly, right, man, did they beat big, big
beat on those numbers? Fourteen point eight six percent gain
on the stock today up eight dollars and sixty two cents,
sixty six sixty two let's see Google. This is interesting.

(11:00):
You know, we talk a lot about AI on this program,
especially on Mondays when my brother joins us, but chat
gpt open Ai of course the parent they announced that
open Ai starting today has a browser now, and so
that put pressure on Google. Stock lost five dollars and
sixty eight cents right coming into their neighborhood two fifty

(11:21):
one thirty four. Let's see Newmont was down eight dollars
and fifty nine cents, a nine point zero five percent
loss to eighty six thirty. I'll tell you the reason
why in a moment. It was because goal prices humbled today.
So we'll come back. We'll hit the commodities, the interest rates,
and then get into our topic divorce and the family home.
What are your options with Corey and Dwight turned over
to Christen snow right now traffic Center. Hello Kristen, Welcome

(11:47):
back to the John Sanchez Show on News Talk seven
eighty KOA to the Cory agevege related to White Millard
of Highlands Mortgage. Once again, we finished with a record
close of the Dow, up two eighteen to a level
of forty six nine twenty four. Stack lost thirty seven
SMP unchanged all right on to the commodity side, twenty
one cent gain and oil fifty seven to twenty four
a barrel, And oh boy, did the speculators have a

(12:07):
ball today. Goal prices tumbled. Now, keep in mind, pretty
much just gave back about the last two days worth
of gains. So take that with a grain of salt.
But yeah, largest one day loss I think, going back
to twenty twenty, two hundred and forty eight dollars and
fifty cent decline in Goal down five point seven percent,
four one hundred and sixty dollars and sixty cents an ounce.

(12:28):
Mister Millard tenure treasury down two basis points three point
nine six percent sub four percent. How do we do
on that thirty year mortgage?

Speaker 4 (12:35):
Hey, we're doing great, John, I mean people are going
to get back out in the field, I think, and
start looking at homes. So according to Martgain's News daily
thirty or fixed rate is six point one seven. Okay, John,
that's versus six point three six last week. Right, you've
gotten a twenty basis point drop just in the rate
on coming on, you know the front of next week's

(12:59):
Fed interest rate decision, which I think.

Speaker 1 (13:01):
We'll get more people back out. We don't know what
it'll do the mortgage rates.

Speaker 4 (13:04):
We'll get people back out in the field looking at homes,
but the fifteen year five point seventy five, the lost
we've seen it in a while. And then your fahamva's
in the five point nine range, so you know, ten
basis points under a six percent. I mean, I'm smiling,
but we need the activity. People are still a little apprehensive,
a little bit fear factor. So there's just still not

(13:28):
a lot of confidence in I guess where the rates
are at right now?

Speaker 2 (13:32):
Yeah, yeah, absolutely absolutely. Well, final, that's great news day.
Thank you for bringing us up to date on that.
The final thing I'll mention back to the market, which
kind of ties into to Dwight and the yields coming down,
et CETERA pretty quiet out of Washington today about it.
I think it was about eleven o'clock. Trump commented on
a meeting with Chinese president. She's saying maybe it won't
happen though. There was not much else to report on

(13:53):
the trade front, so that was the headline, right, So
we still market's still paying very close attention. Is there
going to be a meeting as or not. And you know,
still negotiat on the Earth situation, et cetera. So things
still very fluid coming out of Washington. But Corey, did
you see that the President today demanded that the Department
of Justice pay him? Do you see that? Two hundred

(14:14):
and thirty million dollars because they investigated him in his
first run.

Speaker 3 (14:18):
And I'm curious how that will play out when your
boss demands that you pay, Like, do they have to
pay an investigation department? Yes, very h It's very interesting.
I also find it interesting just me, like the construction
going on, Like I've been reading this story about them
tearing down half of the White House to build his
ball room. I want and the world is happening. But anyway,

(14:39):
it's like a cartoon that.

Speaker 2 (14:40):
They told the Treasury Department not to be all the
employees not to be taking any pictures of it. Yeah,
and to focus on their job.

Speaker 3 (14:48):
Yeah, the ones that are still working, the ones that
are still working, the construction guys are working, but the
people that actually are in the government are not working
to the broom. Awesome, it was. It was so if
you read sorry to get off on a tangent, they said,
oh no, it's all private donations and then Trump's thrown
in and then all private and then I was reading
the story on CNBC and so they had to say
our parent company contest, Comcast, was the largest donator. Can

(15:13):
you imagine the strong arm? And it's like, hey, I'm
calling on back of the White House. We're doing a
huge dream model and if you'd like to stay in business,
you'll you'll loan.

Speaker 2 (15:21):
Somebody if you don't want your FCC license, yam, exactly.
We accept donations and increments of fifty or one hundred
million at at times exactly.

Speaker 3 (15:29):
Yeah.

Speaker 2 (15:29):
Oh man, Like I was telling my wife earlier today,
when that story broke about him, you know, say the
Department of Justice, it was on'm two undred and thirty million.
That was after he strong armed what was at ABC
a couple of weeks ago. What was that that price
tag because he sued him for because they slandered him supposedly. Yeah,
that was like what fifty some odd million. I think
that he got out of that one. Yeah, they just

(15:51):
they just roll over and just pay him because, like
you said, they want to stay in business.

Speaker 4 (15:54):
Well, that'd be like the Transportaso's secretary of con granted,
you know, Hey, you know, I got this little thing
going on.

Speaker 2 (15:59):
What are you think those big green trucks to work?

Speaker 4 (16:02):
Yeah?

Speaker 1 (16:02):
Yeah, yeah, you like them, don't you?

Speaker 2 (16:04):
Yeah? Exactly? You like how they look right now, don't you?
Oh my goodness. All right, well, let's get to our topic. Boys.
We're gonna try to get some of these seven points
hammered out before we go to break at least one
of those. So once again, our topic divorce and the
family home. What are your options? So we're gonna start
with our first point that we've put together for you. Again,
very tough situation. But Cory, you alluded to this briefly.

(16:26):
Let's go into more detail. Your first point is know
the home's true value. You gotta call Richard Lace or
any other great appraisal appraiser like he is. Don't rely
upon the Zillow value. Get an independent appraisal. And then again,
equity determines who gets what and whether a buyout makes sense.
It all starts with that appraisal.

Speaker 3 (16:46):
Yeah, it starts with the appraisal, and very so. And
I'm trying to remember if I've ever had any divorce
clients that agreed on the value. There's always what I
have noticed and maybe it was just my client. It's
like the one who feels like they're getting the right,
like the person who's there's always somebody who's who kind
of started the divorce, and the one and then the

(17:07):
one who feels like I didn't want to get divorced
always feels like they're getting the run and the deal
on the value wise, and if that makes sense, and so, yeah,
you got to figure out the value. And there's two things.
You want to get an independent appraisal. So if everybody
can agree on someone like Richard, then let Richard go
do his job. If you get two appraisers, you know

(17:28):
the wife wants this one and the husband wants this one,
then usually what attorneys will do is they will throw
three in the hat see if they can come up
with it. If they don't, then the judge gets to decide.
But the ultimate barringer of the value of the house
is when you put it on the market and sell it.
And Richard will tell you the same thing I mean
these are. He'll come out and say, hey, this house
is worth x that as of today. That's everything I know.

(17:49):
By the time you get around to selling this, you know,
the market may change.

Speaker 2 (17:52):
The lit it.

Speaker 3 (17:52):
They go up, may go down, but you want to
get a fair feeling for what it is.

Speaker 2 (17:57):
With that appraisal. Is we'll get into come back from break.
That appraisal really comes into play. Not only if they
decide to sell right away, so divorce right they're in
the divorce, they both move out, put the house on
the market, et cetera. But as we're seeing which is
becoming very common, we're seeing as we'll discuss again cohabitation
right in regards for the kids, but also when spouse goes,

(18:18):
you know what, I want to stay here. I enjoy
it and maybe I'm going to keep the kids right,
and the other one's like, hey, I'm out of here,
I'm moving to Texas. Right, So that appraisal, no matter
what happens, it has to be conducted again to determine
all these other different scenarios that we're going to be discussing.
It's a must. Absolutely.

Speaker 3 (18:38):
Yeah, at least so you have again if everybody's getting
along and you can say, okay, Richard came out, he
says it's worth five hundred. I agree, it's worth everybody agrees.
Then at least now you can kind of start finishing.
But if one person thinks it's worth eight, the other
one says it's no, it's worth four, then you know
one person's going to think Richard's wrong, know what, no
matter what he does. But yeah, it's kind of a
discussion starter if you will figure out.

Speaker 2 (19:00):
Last question, have you figured have you seen by going
to court a lot on these Corey. Let's say to
that scenario where you got three appraisals, does the judge
tend to kind of create his or her own value
or would they take an average of those three appraisals.
How does the judge, who's not a realist her figure
that value out?

Speaker 3 (19:20):
Most of the time you don't get three actual appraisals.
You'll get three appraisers, and the judge will say the
two parties are gonna pick one of these and they're
going to agree on it, and if you don't, I'm
gonna pick one. And then as an independent third party,
whatever he or she appraiser comes back at the judge,
will I'll take us fact at that point? So they
won't Yeah, they won't make them spend the money to

(19:42):
go get the actual appraisals, but they'll make them agree
on an appraiser Okay.

Speaker 2 (19:46):
Okay, misunderstood that. All right, Well, there's your first thing,
know the home's true value. Will continue on our other
points on what to do with your primary residence after
a divorce or duram or before. Just never know what
phase that's going to come into play, but at some
point you're gonna have to deal with that house. It's
turned over to Jack Saving he's got new traffic weather,
Hello jet, Welcome back to the John Sanchez Show on

(20:09):
Newstalk seven to eighty k waits with Da White, Mallard,
Highlands Mortgage, Coreyerage Dividuality once again, a tow eighteen record
close on the down up to eighteen, that is to
a record close of forty six and as I get
lost thirty seven, the S and PN changed divorce in
the family home. What are your options? All right, we
got a bunch of them for you. Let's get hustling
guys back to once again to recap our first one
which we were talking about before we went to break,

(20:31):
which is know the home's true value. The only way
you can do that is you get an appraisal and
then that will be regardless of whatever situation up, buy out,
an outright sale, etc. That will establish the foundation for that. Okay, Corey,
let's come down to point number two. Understand the ownership options, right,
so you've laid it out basically three of them. I

(20:52):
want you to and Dwight to explain them. First option,
sell and split. Right, that's the cleanest. Go to Corey,
So I want to sell the house, sell it, take
those proceeds, divvy them up. Whatever that ratio you guys
depen upon buy out. One spout spies out, the other
co own temporarily. So Corey go into details on sell
and split first.

Speaker 3 (21:10):
Of all, Yes, and again, sell and split. It's sometimes
it's the hardest emotional wise because you're getting rid of it.
Sometimes it's the easiest because nobody wants to deal with
the house. But you're going to sell the house. You're
going to get the proceeds. That's a lump sum depending
on how the divorce is going. Is split it fifty
to fifty if that's what the judges agreed to, and
everybody's agree to, and you get to move on and
everybody kind of starts fresh, and there you go. So
that is again the easiest to figure out who gets what.

(21:34):
Maybe not the easiest emotional wise, the buyout and this
I see this week though, yeah, please please.

Speaker 2 (21:43):
And folks, if you own property in California, make sure
your accountant is involved in knowing what's going on with
this divorce and the sale, because many times you can
get caught where you think, oh, I get the half
a million dollar exclusion because we were married, right and
maybe divorce halfway through the year or something. There are
some very very stringent laws as to who gets it right.

(22:06):
Do you get the half a million or do you
get two hundred and fifty thousand, so on and so
forth again, whole another show. But just let your accountant know, Hey,
we're going to be selling. What's the expected tax ramifications
if any?

Speaker 3 (22:19):
Sure? Yeah, absolutely, So Now on the buyout. And I
do run into this one a lot. I think a
lot of times people start out this way and then
they have to figure out if they can really do it.
But this would be to say, hey, we have let's
just pick a round number one hundred thousand dollars in equity,
so you owe me fifty thousand dollars in this divorce. Well,

(22:41):
the only way that the I want to be off
of the deed of trust. I want to no longer
have my name on the loan. Well, that means the
spouse that's staying has to go get t Why correct
me if I'm wrong. Probably I cash out refinance to
get their hands on the fifty thousand plus get the
other spouse's name off the deed of trust to pay
him or her out and retain the house. And so

(23:02):
I do see a lot of times most of the
time that's the route that people start with. Yes, I
would say at least fifty percent of the time, it
doesn't work because of trying to qualify on your own.

Speaker 2 (23:13):
Okay, so do I now you come into that equation?

Speaker 1 (23:16):
Yeah, yeah, Corey is absolutely correct.

Speaker 4 (23:19):
So the buyout sounds good, but remember a cash out,
I could go only to eighty percent loan to value, right, I.

Speaker 1 (23:25):
Mean, unless you want to go get a heat lock.

Speaker 4 (23:27):
But typically then you the house was typically purchased with
two incomes. So now you're going and doing a cash out.

Speaker 1 (23:34):
So do I have enough equity? The further the equity position,
the harder it's going to be for.

Speaker 4 (23:39):
That one person to qualify. Now doesn't say it doesn't happen,
but Corey's right. It starts out that and pretty soon
you go, We're just going to sell it and I'll
come back to you, Dwight when when I've got my money.
And sometimes I get both parties. You know, you can
try to be amicable the whole thing. But that's a
tough one. It's a really tough one, but it can
be done.

Speaker 2 (23:59):
I've excuse me. What I've helped clients with in that
scenario is, and it gets really messy, is going to
the four O one K and borrowing from their four
oh one k to use some of that cash to
pay the spouse that you're trying to buy out. Now
where that can get messy is typically, of course, in
a divorce, spouse is going to get half the four

(24:20):
O one k. So this is where you start kind
of playing the whackam mole game. It's like, I'm going
to give you this, but I'm going to keep this,
and i'll give you that and I'm going to keep
that right, and you start negotiating around with all the
different assets, and the more money you have, the more
complicated it gets. But I've seen that done a lot
again where you just go tap the four ol one k,
borrow against it, and you know, deal with the loan payments,

(24:41):
et cetera.

Speaker 4 (24:41):
But John, that's why you know, in the beginning, when
Corey talked about know the value, that's the generally, that's
the nucleus where everything else works around it, right, and
it it's the hub, and you know then that everything
gets to split off of that value.

Speaker 2 (24:56):
But it's it.

Speaker 4 (24:58):
These are great points, but real world gets tough, so
you need you need people like you me Corey. Corey
helped me go through mine. I mean, you know, because
you just aren't clearheaded half the time. You're just trying
to figure it out, and somebody comes in like Corey.
I mean, anybody listening or watching, that's the man, because
I mean I wasn't easy. I'm never easy, and he

(25:20):
took me right through it too.

Speaker 1 (25:21):
So you got to have the professional there.

Speaker 2 (25:24):
Yes, indeed, all right, Corey to our third point, under
understanding ownership options, we had sell them split buy out
the co owned temporarily. And this one is, you know,
for the benefit of the kids.

Speaker 3 (25:37):
Well usually for the benefit of the kids, but it's
very popular now because of the low interest rate. Somebody
wants to give up the interest rate that they got
back five years ago. And so I've seen co ownership
temporarily because they don't want to get rid of it.
I've seen cohabitation during the divorce because they have their
living expenses are so low based on them rate they

(26:00):
have on their mortgage that the other spouse can't afford
to go out. The thing here is to remember, again
to me my personal idea or my personal thoughts on it,
you have to have an agreement to start. And then
if everybody says, hey, we're going to keep the house
and we're both going to live here, or we're going
to keep the house and you're going to move out,
but we're going to retain it, you need to figure

(26:21):
out the value it starts at. If you're going to
keep it, who's making the payments? Are they still fifty
to fifty? Who's going to live there? Have everything in
writing if you can. I don't know, I'm not smart
enough to know if that would be in a divorce
decree or separate agreement, But somewhere, have it written down
that we're going to keep this asset. Here's who's paying
for the asset when we sell the asset, Here's who

(26:41):
gets to keep x amount, you know, six versus forty percent.
Because people are making different payments, all those things. It's
a business arrangement at that point, John.

Speaker 2 (26:51):
Yeah, and again I want to add one more thing
to your great point, Corey. Collabitation is very common. But
also what's becoming very common I've seen with clients is
so you got Sally and John Doe. Right, John says, Okay,
let's keep this for what Corey said, the low interest rates,
or usually it's for the benefit of the kids, right.
The kids are embedded in schools and sports, and they
don't want to disrupt them, at least, you know, during

(27:12):
the school year for example. So John will move out. John,
of course he's got now rent, right, He's going to
go rent an apartment, go rent a house. And then
what they'll do is they'll swap where John will come
live in the house Monday, Tuesday, and Wednesday, and Sally
will go live in John's apartment, you know, Monday, Tuesday, Wednesday,
and they swap things like that. Well again, I've seen

(27:32):
it also where John will come back and Sally will
still be there, right, but John still has this expense.
So there's a million different scenarios. But I love your point,
Corey put it in writing because and everly when the
house you finally do decide to sell, I promise you
there's going to be hurt feelings and John's going to go,
wait a minute, here, I get more money because I
had to go rent an apartment for two thousand dollars

(27:54):
a month and you got to stay here, Sally. And
you see how all that gets really compliment.

Speaker 4 (27:58):
Yeah, coy to Corey's point, though, it can all be
articulated in a settlement agreement. Every bit that you talked
about can be put in a settlement agreement. So that's
a good point. Get it all written down, have it
done by an attorney in a settlement agreement.

Speaker 3 (28:13):
And the other thing. While we're on this point, and
I brought it up a couple of years ago, every
most mortgages are Fani May or Freddie mac. Even if
they're not Fanny Freddy, they're still in a traditional Fannie
May deed of trust. Those deed of trust. Deeds of
trust allow for an assumption by the divorcing spouse. So

(28:36):
if one spouse moves out and they want to take
over the loan, they have the right to assume it
and keep the interest rate. They still have to qualify.
They still have to go jump through the hoops. But
it's the only time that I know of. Do I
correct me if I'm wrong that a Fanny Freddie loan
can be assumed is in the case of these divorces.

Speaker 4 (28:54):
But to your point, qualifying, and it doesn't apply to
Jumbo or other. You know, Corey's right, but that's something
we really you know, I didn't even know. I wasn't
aware of, and you know, it's a it's a good
feature in there for those that can take advantage of it.
But you got to qualify, like Cory said, but at
least get.

Speaker 2 (29:12):
To keep the right Yeah, yeah, which of course so
very important in this environment. All right, we come back.
We'll hit point number four, which is excuse me, a
point number three is all factory and affordability and taxes. Okay,
so obviously we're not gonna get through our seven. So
what do you guys say. Let's carry this over to
Thursday show, right, so we'll get yes, wrap up point three.
Speaking of wrap up, let's do it in the right
now traffic center. Nobody better to do it than the

(29:34):
wonderful Christens Noo. Hello Christen, Welcome back to the John
Sanchez Show on News Talk seven eighty k O which
Corey is a vigility phone number.

Speaker 3 (29:43):
Servenx seven three six seven zero zero mister Millard two
four zero two zero two two.

Speaker 2 (29:50):
Thank you fellows. Do appreciate it all right? What to
do with your primary residence after divorce? We said number one,
know your homes value. Number two, understand ownership options sensors.
There's three, you sell and split, you do a buyout,
or you co own temporarily. Doctor number three or number
three is a factor in the affordability and taxes, and
we actually pretty much touched on that again. Post divorce

(30:11):
income may not support the old mortgage. You got to
consider the tax ramifications. As I said, when you sell
it the two fifty five hundred exclusion. Get your CPA
involved in that.

Speaker 3 (30:20):
Right.

Speaker 2 (30:20):
Let's go to point number four. Protect your credit and liability.

Speaker 4 (30:23):
Yeah, we don't care what the divorce decree says because
half the time they're never fulfilled. So I mean, if
you let's just assume that both people are on title.
So I would just recommend don't just go do a
quick claim. You know, for whatever reason, you need to
be fully off the liability if you're you know, depending
on what the what the agreement is, so the only

(30:45):
way you can do that, Corey said, there is a
provision the Fanny Freddie Docks that allow you to assume
if you can qualify, but outside of that, generally it's
a refinance and John, most of the time you got
to bring in a cobar or you know, because you're
only dealing. You bought the house with two incomes, you're
going to most likely need a second income, so you
see that. And if you have a he lock out
there with especially with a zero balance, freeze it right

(31:09):
away so neither one can go right checks.

Speaker 2 (31:11):
Oh that's a good point.

Speaker 1 (31:12):
Yeah, that creates a real problem.

Speaker 2 (31:13):
At the end, Corey. Judges don't like that too much either.
If you decide because you're so upset at the spouse
that this filed for the divorce and you attap that
that credit line for you know, one hundred thousand dollars
and yeah, all of a sudden, now there's a new
debt that nobody knew about.

Speaker 3 (31:32):
Yeah, they will, they will figure it out eventually. If
the person, you know, if everybody's got the divorce attorneys,
which are the very nice people outside of court, but
when you get a divorce attorney, in court. They're very
vicious and they're going to go ahead, and I say
that with all due respect, they're going to find stuff,
they're going to come after you. And if if you

(31:52):
took the extra hundred thousand, you'll probably end up repaying
five hundred thousand because of it. So most of the
time it's not worth trying to pull one over on somebody.

Speaker 2 (32:01):
And that goes same thing for credit cards or anything else. Yeah,
absolutely don't go out and incur a bunch of debt,
you know, under your visa card that's you know, a
joint account, right, and the same thing. Just don't do
any And most bankrupts era divorce attorneys will say freeze everything,
and you actually have to sign a document saying you
know what, no buying, no selling, no doing anything. Everything

(32:24):
is frozen at that point. All right, Corey, let's go
to point number five plan for future housing needs. Right,
we get this one behind us, but oh we still
need a roof over our head.

Speaker 3 (32:34):
Absolutely, especially when there's kids involved, right, And that's always
kind of the crux is do I want to stay
in the same school district? What do the kids want
to do? Okay, now do we need to can I
rent here do I need to buy something? Because an
apartment big enough when the kids need to come see me?
All these different things. So you got to plan for
future housing needs, not just in the buy sell side
of it, but just kind of the living side of it.

(32:55):
Like how when this is all said and done, hopefully
there's two incomes for two separate people. Is there enough
to support the family and the best way that you
can until they become of age and they can kind
of move on on their own. So that's always a
big thing, and that is what the judges are looking
out for. Ultimately, their job is to protect the kids
and rightly so.

Speaker 2 (33:15):
So all right, I think we can squeezeze point six
and seven include the home and the broader financial picture.
Like I was saying, the wacka mole. It's like, I'm
going to take some money out of this house, but
I'm gonna give you a portion of the four oh
one k or something like that. Right, that's what a
good divorce attorney is going to do. And then do
I hit the seventh point? Involved professionals early, the financial amaspa, attorneys,
et cetera. Makes it so much easier. Just get everybody

(33:35):
involved everybody on the same.

Speaker 4 (33:37):
Three of us right here at an attorney, absolutely very
important and a CPA.

Speaker 2 (33:43):
You got it all right. We hope that helps you.
Hopefully you never have to listen to this advice, that's
for sure, but if you do, now you have some
good information behind you. God, Lets have a great afternoon.
Don't forget to pick up our podcast. We'll be back
tomorrow on The John Sanchez Show. Take care. Dwaite Millard
n mls ID number two four one nine a license
Mortgage Loan Officer with Highlands Residential Mortgage Limited and Equal

(34:04):
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(34:26):
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(34:48):
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