Divorce & Real Estate: Why Didn't My Lawyer Tell Me That? | Episode 230

Divorce and Real Estate: What Your Attorney May Not Tell You

In this episode of Divorce at Altitude, Ryan Kalamaya is joined by Karla Kyte, a Certified Divorce Lending Professional, to discuss one of the most overlooked parts of divorce: real estate and mortgage planning. They break down the costly mistakes people make when they assume keeping or buying a home will be simple after divorce, and why involving a divorce mortgage expert during settlement negotiations can make a major difference.

Karla explains how child support, spousal maintenance, temporary orders, refinancing, equity buyouts, and loan assumptions can all impact whether a divorcing spouse will actually qualify for a mortgage.

Guest Information

Karla Kyte is a Denver-area lender with more than 27 years of experience and has been a Certified Divorce Lending Professional (CDLP) since 2017. In addition to her lending work, she now runs a fee-based divorce mortgage planning business focused on helping divorcing individuals and attorneys structure settlements that can actually be executed after decree.

Episode Highlights

Why Real Estate Is So Often Mishandled in Divorce
Karla explains that many divorcing spouses ask, “Why didn’t my attorney tell me this?” The reason is not that attorneys are doing something wrong, but that mortgage planning is its own specialty.

How Child Support and Maintenance Affect Mortgage Qualification
One of the biggest issues is timing. To use support income for mortgage qualification, the receiving party must usually have both a court order and a documented payment history.

Why the Length of Support Matters More Than People Realize
Karla points out that if support ends too soon, it may not count at all for mortgage qualification. That means even a person receiving significant monthly support might not be able to use it if the support term is too short.

The Importance of Temporary Orders
Temporary support orders can start the clock for mortgage qualification. If support is being paid during the divorce and documented correctly, it can later help a spouse qualify once permanent orders are entered.

Why Payments Must Be Set Up Properly
Support payments must be traceable. Karla explains that support should be paid from one spouse’s individual account into the other spouse’s individual account. If parties simply move money around informally or through joint accounts.

What is Divorce at Altitude? 

Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado. 

To subscribe to Divorce at Altitude, click here and select your favorite podcast player. To subscribe to Kalamaya | Goscha's YouTube channel where many of the episodes will be posted as videos, click here.  If you have additional questions or would like to speak to one of our attorneys, give us a call at 970-429-5784 or email us at info@kalamaya.law.

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DISCLAIMER: THE COMMENTARY AND OPINIONS ON THIS PODCAST IS FOR ENTERTAINMENT AND INFORMATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROVIDING LEGAL ADVICE. CONTACT AN ATTORNEY IN YOUR STATE OR AREA TO OBTAIN LEGAL ADVICE ON ANY OF THESE ISSUES.

Transcript

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Ryan Kalamaya 0:01

Welcome back to another episode of Divorce at Altitude. This is Ryan Kalamaya This week, we're going to be talking about divorce and real estate. There's been a lot of discussion in the news at the time of the recording about real estate and home prices. We've had several episodes in the past, but we are joined by our guest. I'm going to introduce her or let her introduce herself, Karla Kite to talk about the common mis. Perceptions and really get to the heart of why didn't my attorney tell me this and I'll let her explain more, but I think this is going to be an informative meaty episode. So I look forward to conversation, but Carla, before I go on welcome to the show.

Kalra Kyte 0:45

Thank you. And thank you for allowing me to be in this space because I wish I could scream from a mountaintop everything that I know. There's just so much

Ryan Kalamaya 0:56

indeed. We've got the time and we won't be screaming. So if you're listening out, walking the dog or in your car but I think what the point is that it's this, that important and it happens so before we, started recording, we talked about a couple of different examples and real estate. And in particular home residential real estate, the marital home that it comes up in, in nearly every divorce. But before we really get into the first topic, which is child support and maintenance and how those kind of relate to real estate, Carla, can you give our listeners a little bit of background on who you are and what experience you have that would result in you shouting from the mountaintop?

Kalra Kyte 1:38

Yeah, absolutely. Thanks. So I have been a lender in Colorado, specifically in the Denver area for over 27 years. I did my certification, which I'm A-C-D-L-P, which stands for Certified Divorce Lending Professional, and I did that back in 2017. And to be honest with you, prior to that, I would always just, I couldn't figure out why we were not included in the settlement process. Like, why wouldn't you reach out to a lender and ask how to put this together properly so that it can actually be executed afterwards? When I heard about the CDLP I actually flew down to Arizona for a couple of days to get the certification. And since then we're a high volume team, so I just, I have a ton of experience and I was able to bring my daughter on as a business partner about five years ago, and she is also a CDLP, but she's only 30. So it's not. She's not really her GM but it's allowed me to really step aside. And I now have my own fee based divorce mortgage planning business that I run separate from the lending side. There's just, there's a huge need for people to do proper divorce mortgage planning during the settlement phase, before they all agree on something that. Oh, we can't do this. And so I see that time and time again constant.

Ryan Kalamaya 3:03

Yeah. And I see time and time again, people, even when I have the discussion of you're going to need to refinance or figure out the financing. People are, they'll look at me, Erica, Melanie Wolf, our hypothetical divorce clients, and they'll say, really what, because at the time of this recording, mortgage interest mortgage rates are in excess of 6%. And a lot of people, when you were. Cutting your teeth on the licensure, people were locking in the 3% and a 4 percent mortgages. And so they're shocked that they have to, go through this whole process. So let's jump right in the first topic that we have. Talk to me about child support and maintenance and how that matters from a home buying perspective.

Kalra Kyte 3:50

So the simple answer It is really you have to have, you have to have received the support. You have to have a court order and receive this support for depending on the loan, either three or six months. And then at the time of closing on the loan, the support has to continue for three years. And I say that these are different loan types because FHA and VA, you only have to receive for 3 months, whereas conforming you have to receive for 6 months. So the problem is that if you have a client that is only receiving support for 4 years, they have a 6 month window. Where they can actually complete a purchase transaction or a refi transaction

Ryan Kalamaya 4:36

so that window then can be complicated if there's some sort of property payment in a year that they were going to rely on. For the down payment of a new house or that sort of scenario and people I think are naive. You and I were talking before the show. I had a mediation two days ago and the other side the recipient. Of spousal maintenance said, I want, we were negotiating a buyout and there was a request for a year and it was like, I need to have a year of payments. And she was working with some lender, at least that was what the media said. You're shaking your head because I did the same thing. I was like, why? year, like it's gotta be at least a lot longer than every banker I've ever talked to is said that they need longer than a year. And you and I were talking before the show that that I was not crazy. So the kind of rule is three years.

Kalra Kyte 5:32

Yeah. And so that's part of the problem though, is that people are getting information from people that don't understand exactly what's going on with them. And I hear this time and time again, and, so a CDLP is one step closer to getting the best information but sitting down with somebody like myself that actually does this on a day in day out basis and we'll spend the time to help them plan properly is really what they need to do. They get bad information from their current servicers. They get bad information from their current loan officers. And some loan officers know some of this business. But I would say most of them don't know a lot of the details that we get into. So there's like certain things we could do with your client there. We could have the maintenance go longer. We can pull from something else and turn it into maintenance. We can set up some different accounts. There's a lot of different things that we can do if we're involved in that planning stage.

Ryan Kalamaya 6:35

Yeah, to be clear. We, my client was the 1 that was paying it and we, we had a there was a 100, 000 dollar payment and we said, instead of a year and 100, 000, we'll give it to you over 3 years. And it was the same kind of net present value. And they said, no but it would have bet it w we were like, this, aren't you, don't you want this because this shows the banking I knew enough to, we weren't the ones that my, my client didn't need the loan but that was an offer and I thought it was somewhat of a fumble by that. Side or that attorney that is just an example. I think it's Just something that you see and I see you know with a fair amount of regular regularity. Carly Can you maybe talk a little bit about the difference between? Child support, spousal maintenance, and in particular, because we've had podcast episodes, there's a how to episode on the difference between contractual maintenance versus modifiable maintenance child support is always modifiable. Maybe talk to me about what, whether that matters. If you have contractual maintenance of five years or three years, the minimum, and is that different? As opposed to child support of the same amount for three years, but, the kind of punchline is that child support could change in a year. Does the bank really care?

Kalra Kyte 7:56

If it is specified we see a lot of we see a lot of maintenance that is gradual, right? So they might start out at 5 grand a month and go down to. Two and then down to a thousand, whatever. So we will only use that lower amount. So when we're talking about anything like that with maintenance, with child support, it's when the child ages out of support, which is typically 19, unless otherwise stated. If we're dealing with child support and the child is already 16, we can't use a dime of that because again they have to have received it for 6 months and it has to continue for 3. Any support that is less than. Three years and seven months would not be usable at all whatsoever.

Ryan Kalamaya 8:43

And for listeners, I've been doing this long enough that maintenance spousal maintenance alimony, it used to be a tax deductible for the payor and it was taxable income for the recipient. And so there were circumstances where we could do this tax arbitrage where Eric Wolf would pay Melanie. For example, 10, 000 a month, he would be able to deduct that. So his net cost was 7, 000 because he's at a 30 percent tax rate. Melanie, on the other hand, she's the recipient, but she's in a substantially lower tax bracket. So she would, her net benefit would be more like 8, 500. And so we would really lean into this and we would do it. So we'd have these significant maintenance. And child support in essence awards, but they would be packaged into a spousal maintenance award because they were looking at the whole month cash flow. And it sounds like what I'm hearing you say in that example of the 16 year old that, the parties might agree that spousal maintenance and they characterize it as spousal maintenance. For a particular time period that is beyond the 19 to help Melanie qualify for a loan, even though it's really child support.

Kalra Kyte 10:05

Yes. And you actually just touched on something else I want to touch on if I can. I know this is a little bit off topic, but first of all, so we could extend the child support, right? I think that's okay. You guys could, if you could even just extend a couple of months, and you could lower that amount a little bit. But the whole thing with the taxes, okay the cool thing for the payer, and this is, okay, so this is a Fannie Mae guideline that I will tell you not many lenders have any idea about this. But when we're going to qualify the payer of the maintenance. Under Fannie Mae guidelines, we can deduct that from their income basis instead of hitting them with that as a monthly debt. And it helps them qualify. I have some examples when I'm teaching CE to realtors and CLE to attorneys, I have some examples that would absolutely blow your mind. It goes from not qualifying at all to being able to qualify for a 700, 000 loan.

Ryan Kalamaya 11:08

So what I hear you say is that how the. Payment is characterized both in terms of spousal maintenance and child support. Having a lender or someone like you, consult can matter, not just for Melanie Wolf, who is the recipient. But if you characterize it for the payer in a particular manner that may matter. If Eric, in a year, two years, wants to qualify for a mortgage, him himself.

Kalra Kyte 11:40

Or maybe he's refinancing the marital home and keeping the marital home. I've helped people figure it out so they can both remain in homeownership. That is my goal. And often I work with both parties because if I can work with both of them, I can help them figure this out and find that sweet spot where they can both qualify. Cause we can count that income coming from Eric. For her, and we can also gross up child support since we're on the tax thing here. We can gross up child support to coming to her, but we can deduct that maintenance in a different way that hits him less in his debt to income ratio. Allowing him to qualify for more.

Ryan Kalamaya 12:24

Okay. And that is a good segue into the next topic and that's temporary support and you mentioned, in, in your intro or at the beginning of the show about, the payments during the divorce and how that can matter for qualifying. And I know enough to be dangerous about this. I don't pretend to be an expert but. You are the expert. So tell me what does child support and maintenance on it for temporary orders? How does that matter?

Kalra Kyte 12:54

So it starts that six month clock ticking which is huge. I literally just got off of a call with a lady earlier today. Who I found out she's been, she has, we have to have the court order in place. So the temporary order has to be in place and they have to be making the payments on time. You have to be able to prove that. So what I learned in my phone call is that she's been getting payments on time since October. Now, the temporary support payment that she's receiving now is only two grand a month, but she is expecting 5, 000 a month for her permanent orders, which is fine because as soon as that permanent order goes into place, and we've had a six month track record of him paying the 2, 000 a month, we can use that five grand a month as soon as he makes that first 5, 000 payment to her. And that's exactly what she needs to qualify.

Ryan Kalamaya 13:44

So what I'm hearing you say is that it, there's a clock, it's six months. You need a court order. It starts from that order or that first payment and that you can grandfather in. To the first payment even if the payment changes later on and use whatever that higher payment is, because the, and I've talked about this on, on, on other episodes, I tend to fall into the camp of. If it's all marital property and so Eric and Melanie Wolf, if Eric is, living in the marital house and Melanie's living in the kind of rental place or vice versa, that the kind of payments that are being made are coming out of the marital, account and that we shouldn't really litigate and position and posture about should Eric pay Melanie 10, 000 a month or 5, 000 a month when we don't really know a lot about his income or her income and whatnot, but your example is that it really can matter and it may be worthwhile eat for Melanie to receive or agree to a lower amount that Eric might be more comfortable, obviously agreeing to just to start that clock.

Kalra Kyte 15:04

Yeah, and, the example is that I had. a handful of clients over 2024 that had to take different loan programs because they couldn't get the temporary order put in place. And it's really unfortunate because I know in a couple of those cases they were amicable enough that could have happened, but for whatever reason, the attorney would not. Put the temporary orders in place. For example, 1 client that I'm thinking of right now, she was forced to put down 25%, which she didn't. She wanted to only put down 20%, but she had to put down 25 percent and the interest rate that she took was almost a full point higher than what she could have had. She had temporary orders put in place. It just is helping them be in a better position. And I know if the couple is, if they're amicable enough, I know it's just a stipulation for you guys to put that in place, right?

Ryan Kalamaya 16:01

It is. And the risk is that the posturing is that Eric and Melanie that if they agree to 2, 000 a month. Eric is going to say that's too high, or Melanie might be like, that's too low. We can, there are stipulations where you can state it's 2, 000 a month. And this is the court cannot consider it if the court later determines it's 5, 000 a month. And it should have been 5, 000 a month at the very beginning that there's a true up. That were the, if it's too much that it can it can be credited or offset against future kind of obligations. But if the goal is for example, for Eric to go buy a house, they have kids and they really are, that. That's where they're really trying to provide stability and the housing it becomes paramount that in that, those circumstances, it might be beneficial for them to at least agree to some placeholder amount that, is somewhere in the middle and that it really just to start that process because they might be paying a point in putting substantially more down to begin with.

Kalra Kyte 17:13

I'll be honest with you. I don't even care if they are paying that money and throwing it back into some joint account down. In all honesty, I have to show proof that it's been paid or received. And that's what we're looking for. So obviously this doesn't work if they're not amicable enough to figure that out.

Ryan Kalamaya 17:30

And it also, if Erica, Melanie. If they have a joint account, everything's been coming out of that joint account, this kind of presupposes, not only do you have a temporary order, but you also have an Eric and Melanie separate account, or at least Melanie, if she's the recipient, she needs to go to the bank, create her own account that she then shows deposits into, and that's pursuant to a court order that is temporary support.

Kalra Kyte 17:56

Yes, correct. Yeah. And that's a really good point. Because it does have to come from individual to an individual account. It cannot be funneled between joint accounts.

Ryan Kalamaya 18:07

Oh, okay. That's those orders. I didn't know that. So that is helpful for me to know. It's one of those things that the balancing act of and Carla, you see this, right? Where you're working with people, you have solutions. And, but also people, they're so emotionally, like Melanie might be just completely destroyed emotionally because Eric's having an affair and, she's never, she's just using the credit card. She's never had to go do things on her own. She's just gonna bury her head in the sand and, she just can't deal with it. But it's more of. It's important to explain to her at the appropriate time that, Hey, you need to start getting a bank account set up and working with someone like you to, explain why that's so important.

Kalra Kyte 18:54

Yeah. And those are the people I just want to grab and go. Just stay with me. Just stay focused.

Ryan Kalamaya 19:00

We're

Kalra Kyte 19:01

going to get through this. Yeah,

Ryan Kalamaya 19:02

agreed. I, it's one of those things that it's, I can see where it's going and I can explain why it's important, but also at the same time I've also seen people where they're just emotionally, they're incapable and that's. Moving on, let's the, for the people that are really hot to trot and they want to go buy a house before the divorce is even final. Talk to me about how can you buy a house before the divorce is final? Is that even a thing?

Kalra Kyte 19:31

So we do it all the time. It does take a. Specific divorce type, right? It, they need to be amicable. They need to have the approval from their attorneys. Of course, if they have both, retained attorneys, we need approval from the attorneys. But it's very possible. So what we need to move forward in that space is we need a court stamped separation agreement. And for consumers that are listening to this, that's because we need to know who's paying who, what, how much, how you're dividing everything, right? Because that's the only way that we can actually qualify you for a loan. But we do not make you wait for a final decree. We know that. Divorces are handled very differently by everyone. And so a lot of times they have everything figured out and then they file. And then there's this 90 day waiting period. And it's a long wait. I don't I've been through a divorce, so I get it. Even when you're amicable, being in the house, especially with the children it's no fun. You're getting divorced for a reason. So if we can help them move on without waiting for that final decree, that's really our goal. It saves them money. It saves them time. Sometimes if we, sometimes we will be really strategic with the separation agreement. Like if if they can't qualify for that new home loan with the current mortgage against them, all you have to do in the separation agreement is award that payment to the one spouse. And then that takes it off of the other spouses debt and we won't count it against them. So that's a big misconception that. I've heard from several attorneys and a lot of lenders think that you have to show proof that 1 person has made the mortgage payment for 12 months before you cannot count it against the other person. It's not true as soon as you have a court stamp separation agreement. We will not count any of the debt against the person that it's been not awarded to. Okay. So then,

Ryan Kalamaya 21:38

yeah, I've got a couple of kind of follow up questions on that. So I recently had a case where the parties were both. Renting they had they had sold their house in anticipation of the divorce in the, my client identified a house that he wanted to buy. So we agreed that he would get you, they have, we're sitting on a ton of cash. And it was going to be. Equally divided so he said i'm going to take my 200. I'm going to take 250 000 And that's going to be in advance on what i'm going to ultimately get we're still figuring out a couple other things And so he got the 250 000 that was used for the down payment and it was in the middle of the divorce So we basically had a partial Separation agreement or an agreement that the 250 000 was his And the, he was authorized to use it for his house. And then what we agreed to ultimately is that the cost of the house, cause he had two 50 for the down payment, but then he also had some closing costs that were like 10, 15, 000. So that went in on his side of the ledger when it came to the ultimate reckoning. And so we had a stipulation and he was able to purchase that residence. Through in the middle of the divorce. Is that something that you've common that you've seen?

Kalra Kyte 22:59

So that's not typically what I see. That to me was more of a legal issue, right? Because from a lender's perspective we, the lender on that transaction, maybe was not even made aware that there was a divorce in process. So if they were in that situation where they were both, they were renting because as a married person, I can go out and buy a house in just my name. I don't have to have my husband on it. So he maybe just did it like that, which is totally fine. Typically, there's still a marital home. So there's a mortgage in question, right? And so that's where it becomes a lender issue is because then we're wondering what's going on now with this mortgage and that brings up the, is there a divorce going on? Once the underwriter knows that there is a divorce that triggers the request for the court stamp separation agreement,

Ryan Kalamaya 24:02

right? So another and that was going to be my next example. Is that if Melanie is going to get the house? There is an agreement you know that If she gets the house, she's going to take the mortgage and, they have enough cash where Eric kind of same scenario instead of renting, but Eric, I'm sorry, Melanie, she's going to get the house and we have a court, order, and it could be that she's going to get the house and in exchange, Eric's going to get advanced or some particular amount of money. If. He comes to you and says, I need, I'm, I've been authorized. I got the green light. I've got money to go buy a house. Then the fact that there's an agreement that says Melanie is taking the house with the mortgage. That is what, that's the key magic language that you need to let him proceed. Even though there might be a business, there might be other things that could be outstanding. In the divorce parenting, they could be just in disagreement about child support or other things. But the key thing for you is that you need to see that Melanie is getting the house and the mortgage, which then removes that issue for him in terms of the debt to income ratio and the qualification that would otherwise jam him up on the mortgage. Is that right?

Kalra Kyte 25:25

That is right for the mortgage, but we still need everything else figured out. We can't approve the mortgage, not knowing how the support is going to be.

Ryan Kalamaya 25:37

What

Kalra Kyte 25:40

you were talking about, like getting that mortgage off of his debt. Yes. That would take care of that. But that's still without having a full and here's the thing, and this is why I think a lot of lenders and underwriters will not do this without a final decree, because we know that even though you, even though we are provided a court stamped separation agreement. We know until final decree, there can still be changes made to that. So don't ask me why we are totally fine using that to close a loan with, even though I know it can still be modified for whatever reason, underwriting is okay with that. But I will tell you, some lenders are not okay with that and they need final decree. But yes, we do need, absolutely. We have to have the child support. Maintenance, everything figured out before we can close.

Ryan Kalamaya 26:37

The cardinal rule for me is that people that want to go out and buy real estate when the things are just in such a state of flux. I hear that so much. I want to go buy a place and I'm like, really, do you really like, there's not, there's nothing wrong with renting for a little bit to let the dust settle. And so that the finality that the lenders want. Is consistent with at least some of the discussions that I have with clients who are just really wanting to go out and buy something, but when they eventually are ready, then, they should make sure that they're doing it during the divorce process. I think one of the key headline. News items from this episode is that they should involve someone like you if they're event, if they're thinking about buying something in a year or two years, or they should just, there's really no downside to engaging someone like you to make sure that there's no unintended consequences.

Kalra Kyte 27:34

Yeah, for sure. If they own a home or they ever plan on owning a home. They should absolutely have a CDLP involved in the process for sure and especially because rates are so high right now. I'm not just setting my client up for purchasing a new home at, at decree or whatever. I'm making sure that they're set up to refinance too, because if it is like. If it's a stay at home mom that is reentering the workforce we're planning this all the way out. We're not just planning out to purchase. We're planning it all the way out. Is she going to be in a career that will allow her to qualify in a year or two when the rates are lower and she can refi, this is the last person that I want to miss out on a refinance. So they need it more than anybody.

Ryan Kalamaya 28:20

Absolutely. Let's switch gears and talk about assumption of loans. So this is something I hear a lot about, but yes. Don't see it actual happening in practice. So disabuse me of my skepticism on assumption of loans.

Kalra Kyte 28:38

First of all, let me say that almost everybody has a very low rate that's going through a divorce. I'm shocked when I hear somebody that says they have a rate over 5%. So almost everybody is in a low rate loan because almost everybody refinanced during the COVID years for these low rates and now they're finding themselves, in a divorce. So the biggest. Thing with the whole assumption process is, and I hear this all the time, even from clients of mine they'll say I called my servicer and they said, my loan's not assumable. And I'll say, did you tell them that you're going through a divorce? No, I've actually had some people tell me, no, my attorney told me not to disclose that. So the problem is that yes, they have a Fannie Mae or a Freddie Mac loan. Those are not assumable loans. But in the case of a divorce, they will allow a release of liability, which is an assumption. So they just have to ask the right question.

Ryan Kalamaya 29:39

Got it.

Kalra Kyte 29:41

Disclose that they are going through a divorce. And even then they still might get told no. And I say, call them back, like literally call them back three times. I'll get on the phone with you if you're not getting the right answer. They are assumable. The next problem is. Is that really the smartest thing to do? And we can talk about that or do they qualify? Because just because the, just because it's allowed doesn't mean it's going to happen. People think that just because they pay their mortgage on time that they can assume the loan. Not the case. They have to fully requalify.

Ryan Kalamaya 30:16

Let's take a step back because I jumped the gun. What does assumption of loan, what does that mean? So like for Melanie, what does that mean? Eric and Melanie have a house in Boulder. They have a loan. It's a joint loan or joint mortgage. What does it mean for Melanie to assume that loan?

Kalra Kyte 30:37

So Melanie, we will be able to take over the loan and release Eric of liability of that loan. In its current state, same interest rate, same loan amount, same everything. So she won't be able to use that to buy. Eric out, so if she owes Eric 300, 000 from the equity of the home, she's going to have to find another way to pay him that he lock family money investments, whatever she can find a different way to pay him. If she assumes the loan. That's why it doesn't always make sense because sometimes if you're just looking at it from a cash flow perspective, it makes more sense just to pull an actual refi. So that you can put that into the new loan, the buyout amount.

Ryan Kalamaya 31:24

And that, that kind of leads us into the next topic and that's, paying out equity or off, buying out a spouse of equity in the house. In contrast to the assumption of the loan. So if Melanie wants to avail herself of that 3 percent interest rate, she assumes the loan she qualifies. She's keeping five, the 500, 000 mortgage as it currently is, but she can't go and get a 800, 000 loan at the same interest rate that they had at the COVID. She's going to have to refinance and pull out and she may be able to do that, but I guess with the assumption. Definition in mind, walk us through the paying out equity and the refi, those topics.

Kalra Kyte 32:14

So there, the other thing to know is that there are different kinds of refinances that we can do for divorcing clients. Let's start here. If she assumes the loan, she can do a home equity line of credit to pay him out. She can do a refinance. Most lenders would do this as a cash out refinance, which carries higher fees, higher interest rates, and you're capped at 80 percent of the value of your home. Most CDLP should know this, but there's something called a buyout refinance where the refinance is only used. To refi the current loan and pay off the ex spouse. You cannot pull out one penny more than that. That money goes directly from the title company at the time of funding. To the ex spouse

Ryan Kalamaya 33:05

is there is the benefit that it sounds like that's a specific product with kind of regulations and guidance and everything is the benefit that it's a lower rate than just a normal refinance.

Kalra Kyte 33:18

It's a little bit lower than a cash out refinance, right? But it's a, it's like not a special program. It's just, it's a Fannie Mae Freddie Mac program that lenders just don't know exists.

Ryan Kalamaya 33:29

Okay, but it does result in a so if the real intent if they're if melanie is just razor thin she can't Take out additional money for the bathroom remodel or for you know her post divorce escape to thailand. She has to use all the money, but it's it is going to result in A lower rate which is overall beneficial, especially when you're talking about 20 30 years and she needs to know that and it's not really common knowledge. Okay got it.. So let's get, are you that, that real estate, the key mistakes buyers make during home purchases?

Kalra Kyte 34:06

Just during this process. Yeah. From a lending perspective, but not from a real estate. Yeah. Okay. Yeah. This was just in the outline. So we'll cut this whole thing.

Ryan Kalamaya 34:17

Okay. We'll go back, we'll go back on. Okay. So Carla, let's wrap things up. Talk. Let's finish with the common mistakes that you see. We've talked about several of them, but what are the things that we haven't talked about or covered that you commonly see people make mistakes on?

Kalra Kyte 34:36

Yeah. So first of all, I hear a lot of, why didn't my attorneys help me this? And I remind them that their attorney is not a lender and it's not your job, right? Your job is to legally separate them and take care of their business that way. But your job is not to see them through a refinance. So the common mistakes that I see is just simply that people agree to a settlement that they can't execute after decree. And that this literally happens. I bet you I on an average. Talk to one or two people a day so it happens often if they could figure this out before it would save them time, money, having to go back and modify and then a lot of people can't even go back and modify their agreement because the ex spouse won't meet them at the table for that. So I see a lot of common mistakes. Obviously, when people are pro se and they have no representation. There's a lot of problems there. It's I would say probably the biggest problem also is, as an attorney when you tell them, we'll make sure that you qualify, but they're not calling the right people, like they're calling their servicer or they're calling their old lender and their old vendor might, quickly, maybe they'll quickly look up a guideline. Yeah. Yeah. And say, yeah, you can do this and they just get misinformation. So they agree to something in that settlement and then, they're forced to sell. I talked to a lady yesterday who she was on quite a rant because her kids came home and told her they were upset with her because. Dad now had to sell the marital home because he didn't qualify to refinance and pay her out. And she didn't understand how that was possible because they had qualified previously for a mortgage. And she goes, I don't know if he has more debt. He has student loans. I don't know if those are stopping him, but those are some of the problems. We have things that change in our guidelines. Like we had massive student loan guidelines that changed about a year ago, and maybe they did take out a loan just fine two or three years ago. But today the guideline has changed and he no longer qualifies. And so now the kids are upset with her because he can't refinance and he's going to have to sell their home. Hopefully I can get in with them and we can try to modify something that. But it's just mistakes like that. I see when people are really amicable, they don't follow court orders. So we might spend a lot of time putting something in place that works for them. And it's a great plan. But, because they're so amicable, Eric will. Maybe pay for the kids private school and deduct that from the maintenance or the child support. And then I can't count the amount for maintenance or child support because it wasn't actually paid in full. I see mistake after mistake,

Ryan Kalamaya 37:35

yeah the qualification of a mortgage, this is an area that I would put up with taxes. It is also the kind of aspects of financial advice. I, we'll give I'll walk my client and be like listen, you're going to get X and you're like, if you're going to keep the house. And, it is all of your net worth in your house. That's not financially prudent because you have very little wiggle room in, but it's like a soft kind of guidance. But I think a lot of people, the point I'm trying to make is that I, no one would ever. Criticize me for lacking confidence in. And I feel like there, there are areas where clients come to me and they don't understand that I say, you need to go talk to a lender or someone specific and you need to talk with your accountant or you need to talk. With your CPA about this and they're like don't you know everything? And I'm like I talk like I know everything, but there is a limitation that of in divorce lawyers, we are often the quarterback. We have business valuation experts. We have mental health, we have counselors and we identify issues and then bring in experts like you. And this is that area that I think is. So overlooked by so many divorce lawyers, they don't really identify the issue in the first place of, Hey, you, you might have a problem or you need to go see an expert on this particular issue. I think people when their client comes to them and they say. They might be drunk or they might, have a substance abuse problem to say, you need to go get a specialist or, you need some help here. I think a lot of divorce lawyers that's pretty easily presentable when someone says, Eric is Hey, I want to buy a house, not as many divorce lawyers as should say, you should go seek a specialist on this.

Kalra Kyte 39:43

Yeah. And I think the other thing too, is. You guys figure income very differently than we do. Like night and day. So you might think, that you're setting, let's take Melanie and Eric, for example, if Mary, if Melanie is going to keep the house and Eric's 000 a month and support. How could she not qualify to refinance or assume that the home loan if the payment's only 3, 500 a month, right? And so then if you write something in there saying she has to have the assumption done, within 60 days of final decree, or she has to sell the house. It's not possible because she hasn't received the support for long enough, right? Or just figuring out income in general, maybe Melanie's self employed. And you're coming up with income of 15 grand a month. But when we dig in, we're coming up with 200 a month, like 200 a month. So I think that those are the, just the big differences where it, what we do isn't really common sense. Have these guidelines that are so strict. It's not me that's loaning the money, so we have to follow them.

Ryan Kalamaya 40:52

Indeed. Carlo, it's super informative. Thank you for the time and information for people that want to learn more about you and your team. Where's the best place for them to find you and how can they get in touch with you?

Kalra Kyte 41:07

Yeah. There's a couple of different places. So our main phone number is (303) 525-9077. You can email me at K Kite, so it's K-K-Y-T-E. At my divorce mortgage planning. com all spelled out. You can Google me Carla kite. You can find me all over online. I'm pretty out there. I'm pretty easy to find. I I really hope that the attorneys that are listening, and I know a lot of attorneys listen to this because that's how I was told about it. I really hope that they. See a value in bringing in a CDLP to help with the cases and just taking that burden off of themselves. That's the main thing. But I think

Ryan Kalamaya 41:50

it's something that I'm going to do a better job of in in the future. But, I've talked about bringing in financial advisors and having a divorce coach, the mental health in, in, in the right circumstance, making sure that you really have a team and people, I think they don't understand how important that is. It's during that. Especially divorce lawyers, we go through it and it's not our divorce. It's, it's a stressful job that we do, but it kind of pales in comparison to what the client is actually going through and having people that have answers and making sure they're seeing stuff ahead of time is really one of the critical elements of what Divorce lawyer does but we don't have all the answers. Yeah. So no carla. Thank you so much And I encourage people we'll have a link to your bio and email and phone number in the show notes But until next time thanks for joining us on divorce altitude.

Kalra Kyte 42:54

Thank you

Ryan Kalamaya 42:55

Thanks for listening or watching this short lesson on the Divorce Ude podcast. If you found this helpful, please leave a review or share with a friend. It does help for others that are going through or thinking about a Divorce in Colorado. If you want to find out more information, Please visit Kalamaya Law or Divorce at Altittude dot com and that's K A L A M A Y A law. Remember, this is educational information, it's not intended to be legal advice. Please consult with an attorney about the particulars of your case. We're happy to answer questions. Feel free to give us a call at (970) 315-2365.