Community Property States Mortgage Guidelines For Home Buyers


Community Property States Mortgage Guidelines For Home Buyers

This BLOG On Community Property States Mortgage Guidelines Was UPDATED On August 11th, 2018 and Written By Ron Granado of Gustan Cho Associates

Community Property States Mortgage Guidelines: Community property is derived from older Spanish law, which allows for a 50/50 split in any property owned by a married couple.

  • This all derives from the notion that  maintaining equal ownership is an essential component to establishing a strong family unit, an important civil component to society
  • There are 9 community property states (mostly southwest, except Wisconsin)
  • Unlike states where there is an equitable distribution based on what they bring into a marriage, which is considered separate property
  • That entails a home they owned before they were married to each other, and not specifically guaranteed to be divided

There are Community Property States Mortgage Guidelines For Home Buyers which we will discuss on this blog.

Who Owns Real Property In Community Property States

In California, a 50/50 split is mandated by law. Here are California Community Property States Mortgage Guidelines For Home Buyers:

  • Community property is composed of real property, and personal property
  • Prenuptial agreements aside, when we are following divorce and probate law, these are the factors the state and counties look into when there is a death and no will or trust is established
  • There are positive tax implications when one spouse dies and the property is transferred in the “right of survivorship) clause
  • The tax rates are at capital gains (please, please consult a accountant for real specific advice) are lower when the property is sold

Asset Allocation In Community Property States

More difficult issues are pensions, options,  annuities, or any retirement vehicles.

  • Determining what was established prior to a marriage and together is not clear, if both parties were married before or built up an estate before they were together
  • Owning a business, and how that business was built up, if there is another partner, how will that be divided when the one partner dies?
  • Is there a succession plan or liquidation option?

Community Property States Mortgage Guidelines And Qualifying For Home Loans

Some lenders will count all the debts under a credit report together in community property states.

  • This may negatively affect a borrower’s ability to qualify for a home loan when their combined debt is higher, even if the other is not on the loan

In review, in community property states, the 50/50 model is assumed, whereas in others it must be requested or established when title and vesting are set up.

  • Having a proper estate plan can address these issues and prevent probate, which is expensive and divides families. If you want to avoid this conflict
  • Have this conversation while you are alive and getting along
  • If the children are meant to be the beneficiary,  consult an estate attorney to address division of assets when you are gone
  • This is so complex and detailed a subject, I will write more about it soon

About The Author: Ron Granado

This blog on Community Property States Mortgage Guidelines For Home Buyers was written by Ron Granado of Plymouth Guaranty Corporation. Ron Granado is a guest financial writer for Gustan Cho Associates and a veteran real estate and mortgage market expert.  Ron Granado is sought by many real estate professionals such as real estate attorneys, real estate agents, mortgage professionals, bankers, and consumers for his extensive knowledge in compliance and industry regulations in the real estate and financial markets.

Ron Granado is an expert in all areas of real estate and lending and his major strong points are sales and marketing, title servicing and problem solving, banking, training, and account management.

Ron Granado  is in charge of sales and business development for Plymouth Title Guaranty Corporation. His passion is working with real estate and lending professionals and sharing his invaluable expertise and experience with others who need to keep up to date with the many market changes in order to meet their needs.

On his spare time, Ron Granado enjoys mixed martial arts, scuba diving, fencing, basketball, baseball, playing musical instruments ( Ron is an expert guitar player ), and most importantly, spending time with his wife and three dogs.

Ron Granado is an expert consultant to many real estate and lending professionals. Ron’s expertise includes training mortgage real estate industry professionals, market analysis, focus groups, budgeting, payroll managements, investment and financial consulting, market analysis and updates, and customer and product training. Ron Granado has a proven track record where he has taken the growth of companies to realie a 20% to 50% growth in a matter of two years. Gustan Cho Associates is proud and honored to have Mr. Ronald Granado as a consultant and guest writer.

Ron Granado

Account Executive | Plymouth Title Guaranty Corp

1301 W. 22nd Street | Ste 505 | Oak Brook, IL 60523

Spanish speaking borrowers can get more information at Crédito Hipotecarios. A mortgage informational center about FHA, Va Loans and more.

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