Short answer
A refinance deadline in a divorce agreement should allow realistic time for application, documentation, appraisal, underwriting and closing, should begin from a clearly defined trigger date, and should specify what happens if qualification is not achieved.
Three things a good deadline has
Simple, and frequently missing:
- A clear start trigger — from execution, from entry of judgment, or from a specific date
- Enough time for a full transaction, including appraisal and underwriting
- A defined consequence and fallback if the deadline is not met
Test the deadline before you agree to it
A short feasibility review tells you whether the timeline is realistic for this borrower, this property and this buyout amount. That is a five-minute question with a large downstream impact.
Frequently asked
How much time is typically reasonable?
It depends on the borrower's documentation, the property and the market. Rather than a rule of thumb, the timeline should be tested against the actual scenario.
About the author
Abdel Khawatmi, CDLP®
Certified Divorce Lending Professional and founder of Got Mortgages, a division of Paramount Residential Mortgage Group, Inc. Abdel works with divorcing homeowners, attorneys, mediators, financial professionals and real estate professionals across New Jersey. NMLS #1712023. He is not an attorney, tax advisor or financial advisor, and this article is educational only.