Divorce & Real Estate: Distinguishing Mortgage Balance from Mortgage Payoff

Mortgage
Written By Shannon Lindstrom

Calculating equity can be tricky, especially with a shifting market. It usually starts with the presumed fair market value minus the presumed mortgage balance. There are hidden factors that can impact your equity, and one of the most frequently overlooked culprits is the deferred principal balance. These deferred balances can amount to tens of thousands of dollars, significantly impacting or even completely eroding your equity.

Deferred principal balances primarily arose out of loan modifications during both the 2008 market crash and forbearances during the pandemic, but they can also exist at any time due to an accumulation of delinquent mortgage payments as a result of financial strain.

Keep in mind: The actual payoff balance is a different figure than the mortgage balance, so these deferments often do not show up on a mortgage statement. That’s why a payoff should be ordered; it will show the exact to-the-penny amount that’s owed. 

Before you venture into dividing equity or making decisions contingent on fees extracted from your property's equity, it's wise to pose three pivotal questions:

  1. Have you ever been late on your mortgage payment?

  2. Have you ever done a loan modification?

  3. Have you ever done a forbearance?

For an accurate evaluation of your equity, you will also need an estimated home valuation and a comprehensive title report to uncover any liens, judgments, or encumbrances that can impact your net equity.

Should you need assistance, please feel free to reach out anytime – I have the resources available to assist you. Your comprehensive understanding of your home's equity is vital to making informed financial decisions.

If you have questions and/or wish to schedule an appointment to discuss how Shannon Lindstrom can help you, please call, text or email her at your earliest convenience.

Shannon Lindstrom, Realtor®, CDRE®, MILRES, MRP, VCA
RE/MAX Results
Direct: 612-616-9714
Lindstrom_S@msn.com
Shannon@ShannonLindstromRealtor.com
www.ShannonLindstromRealtor.com
www.ShannonLindstrom.info
www.MNDivorceRealEstateExpert.com

Shannon Lindstrom

Shannon Lindstrom is a Certified Divorce Real Estate Expert (CDRE®) handling the sale of real property in Family Law Cases in the Twin Cities and surrounding areas. Ms. Lindstrom is a reputable and accomplished Realtor known for her exceptional expertise in the real estate industry. In 2023, Ms. Lindstrom received her certification as a Divorce Real Estate Expert from the Ilumni Institute.

Ms. Lindstrom has established herself as a trusted advisor and resource for her clients. Armed with an in-depth knowledge of the local real estate market, she offers invaluable insights to both sellers and buyers, ensuring they make informed decisions with the information provided. Her extensive experience allows Ms. Lindstrom to offer impartial opinions on complex divorce real estate issues.

Throughout her successful career, Ms. Lindstrom has built strong relationships with her clients, earning their trust through her transparent and honest approach. Her strong negotiation skills have led to numerous successful transactions and satisfied clients. Ms. Lindstrom is uniquely positioned to serve divorcing parties and their attorneys by offering her objective and neutral expert opinion in low and high conflict divorce matters involving real property.

https://www.MNDivorceRealEstateExpert.com
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