One of the questions that come to mind during a divorce is how both the division of real estate and the divorce itself will affect the borrowing power of both parties in the divorce. You need to keep in mind that even in states where there is no mandate for a community property divorce there can still be questions concerning how the divorce and real estate acquisition or assignment will affect each party to the divorce. Assets are important in one's borrowing power, so you need to be aware of these affects. Before you begin divorce proceedings, you should speak to your attorney about some of the affects your divorce may have on your assets, especially the valuation of those assets. Keep in mind some of the things that could happen during divorce and the real estate settlement that follows: "The party that earns less money will receive the majority of the divorce marital property thus reducing the value of your assets. "The divorce will create a devaluation of the real estate and the divorce will in essence reduce the net worth of each party. "Sometimes there is an uneven distribution of marital debt that leaves one party unable to borrow because of the debt to income ratio. "In a community property divorce the assets will be divided 50/50 regardless of who contributed the most money toward purchasing each marital asset. When you keep in mind that assets have a tremendous bearing on borrowing power, any reduction in the value of assets will have at least a small negative effect on your borrowing power. Of course, this will depend upon how well off the divorce and real estate settlement leaves each party in the divorce. The key is your ability to acquire enough assets during the divorce to allow you to maintain the same lifestyle you previously enjoyed, and this is true of both males and females. If it's necessary to buy out your spouse to maintain the family residence, you need to have enough borrowing power to do that.
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