When a marriage breaks down one of the biggest problem areas is finance. Each member of the couple has a feeling of insecurity immediately. Where, they wonder, will they live after separation and divorce? They will need to consider divorce mortgages – where the lender understands the situation from which the couple have come and does everything to help people make a new start.

A home, perfectly naturally, has a feeling of security, but as soon as that security is under threat, emotions are raised. A home is where you will have been with your spouse, and possibly raised a family too. So when things go wrong, it is no wonder that people put up their defences. However difficult it will be the subject of finances will have to be discussed between husband and wife, and divorce mortgages will have to be raised.

It is important to ensure that current payments on the house are maintained: existing mortgage payments, house and contents insurance, endowment policies. Arrangements to cover these costs should be made immediately, as non-payment will lead to anger, resentment, and worse – a possible blot on credit ratings.

Emotions will be running high, but it is important to discuss financial affairs sensibly with a view to the future for both parties. Independent legal advice is the best way forward as each seeks to secure a mortgage after divorce. If circumstances ended up meaning a court had to decide the division of finances then it may mean one party gets more money than the other, but both parties should realise that there is only so much to go round. Financial stress can be such that during separation and even after divorce, couples still consider living under the same roof to avoid the need for another mortgage after divorce.

If there is enough money in the pot to buy two houses, then mortgages after divorce would not present a problem, and a court would primarily be concerned about the welfare of any children.
However, if there is not enough money to fund two post-divorce mortgages, the court will of course consider selling the original home and dividing the proceeds as it sees fit. Again, the primary consideration will be for the needs of the children. A home has to be provided for any children, whatever the hopes and needs of the other parent.
It is unlikely that either party will ‘lose everything’ as the court has wide powers in aportioning assets. However, it could also rule that the deeds of the house are transferred in full to one party.

One or both parties can easily be left searching for a mortgage after divorce. It is very difficult thing to have to do at a time of great stress. Some building societies specifically provide divorce mortgages. Sometimes one party appears to take charge of financial affairs, and this can leave the other party feeling vulnerable and unsure. Mortgage brokers can help in this situation. Divorce mortgages cater for the fact that you may need to minimise your monthly mortgage payments until finances are under control. Divorce mortgages can provide additional features and benefits which will not be available when you choose a mortgage from a standard range.

By: Nick Riviera

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Kansieo.com

The Fed has released several reports over the last few years that express, in detail, the differences between mortgages offered to minorities and mortgages offered to whites. While the industry tries to maintain that they offer fair business practices, the results don’t support this at all.

Minorities are more likely to be denied a home loan, often pay higher interest rates than whites and frequently must provide a larger down payment. The gap between minority home owners and whites continues to narrow at a snail’s pace, but steps are being taken to help change the situation.

Loan Rejection


African-Americans and Latinos suffer a large percentage of rejections when applying for mortgages, research suggests. Latinos have the highest denial rate, nationwide, with African-Americans coming in 6th, behind Latinos and other minorities. Lenders say it has nothing to do with minority status and much more with credit ratings and debt loads that are not taken into account by the surveys.

Local and national programs have been instituted to help minorities achieve home ownership, including Self-Help, HUD and other programs. Wachovia and BB&T also offer several programs on local levels geared towards providing sustainable mortgages for minorities.

Higher Interest Rates for Minorities


African Americans and Latinos are much more likely than whites to have higher interest rates, according to a study by the Federal Govt. The study shows that the disparity lies across the board, in all income brackets, but is especially prevalent in the instance of minorities with higher incomes. As strange as it seems, high earning minorities are more likely to get a higher interest rate mortgage than lower earning applicants. The study shows that discrimination certainly plays a role in lending, today.

Legislation, though slow moving, is before law makers to help correct the situation and several groups are lobbying Washington for more action and penalties for lenders practicing racial discrimination. Again, lenders say the study did not take into account credit ratings or debt load for the applicants.

Down Payments


Due to the nature of the loans they are able to attain, minorities are sometimes required to put down larger down payments than whites. This is a major reason for the lower percentage of home ownership among minority groups. The same study cited above released their findings that many minorities are able to pay the equivalent of a mortgage payment in monthly rent, but are unable to save enough money to make a large down payment.

The President’s much maligned “zero down” plan is aimed at providing homes for minorities with little or no money down through the American Dream Down Payment Fund. This program is designed encourage home ownership in minorities, helping to close the gap between minority home owners and whites.

Conclusion


While steps are being made, they are not enough to close the gap between minority home ownership and that of whites. Minorities face a myriad of discriminatory practices in the housing and lending industry and only a concerted effort by citizens and lawmakers will make a difference. Old stereotypes need to be wiped away and new practices instituted to change the face of the lending industry.

By: Michael Tasner

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