Families already are facing financial pressures from rising prices. Now there is a new challenge: the Federal Reserve Bank has increased interest rates for its member banks to levels not seen in over 15 years. On September 30, according to bankrate.com, the average 30-year mortgage rate increased to 6.83 percent.
 
This means that the monthly mortgage payment for a new mortgage (and this would include refinancing a mortgage) will be significantly higher. For example, for a mortgage loan of $300,000 one year ago (September 30, 2021), the 30-year rate was 3.01 percent, so the payment for mortgage principal and interest was $1,266.43 monthly. At 6.83 percent, that same payment would be $1,961.77, almost $700 higher each month, and over $8,000 more each year.
 
Not only will this interest-rate increase impact the affordability of refinancing a mortgage, but it will also make approval more difficult. Mortgage lenders submit applications for refinancing to underwriters, who follow strict approval criteria. One of the most important measurements of the ability to pay is the percentage of income that is committed to debt repayment. With the increase in monthly payments due to higher interest rates, the debt-to-income ratio will go up, rendering some ineligible for refinancing.
 
Since many divorce mediation cases involve a discussion about how to address the home that the couple owns together, conversations—in the face of higher interest rates—may prove to be more challenging.
 
Since many divorce mediation cases involve a discussion about how to address the home that the couple owns together, conversations—in the face of higher interest rates—may prove to be more challenging. Some may decide to postpone a buyout into the future, hoping for interest rates to decline or for increases in income. This strategy depends on whether the person who will no longer be living in the house is willing to remain on a mortgage for property no longer lived in. While most agreements provide protections to the non-resident owner for payment responsibility, that individual will continue to be listed on the mortgage. That listing can impact the ability to take on new debt for another residence.
 
In some cases, there may be no alternative except to sell the home. However, in considering this option, it’s important to understand that the future cost to either rent or pay a new mortgage may exceed the current mortgage cost. This is why, in mediation, we look very carefully at all of the options and evaluate the advantages and disadvantages of each possible scenario.
 
As a mediator, I am also aware that mortgage financing, whether it pertains to buying a home or refinancing a current mortgage, can be complicated. Fortunately, there is a group of specially trained experts known as Certified Divorce Lending Professionals (CDLPs) who can be called upon to assist my clients by looking at their specific circumstances and offering ideas and analysis to clarify possible options for moving forward.  
 
Using mediation and specialized professionals can lead to a much clearer focus on the possibilities for addressing the challenges of current financial conditions. 

Let me share a story from a colleague—a situation many divorce mediators have experienced. 

Steve and Nancy came to mediation. They worked with their mediator to develop a plan for their divorce. Many decisions were made, based on information being shared, options being explored and evaluated, and some amount of negotiation and compromise.
 
They each decided to hire an attorney to review the agreements they made in mediation. Steve hired an attorney who also mediates. Steve’s attorney had certain questions about their agreement, and Steve explained his reasoning for why he agreed to make certain decisions. Nancy engaged an attorney who is a seasoned divorce litigator. This attorney told Nancy that he would reach out to Steve’s attorney and attempt to renegotiate the mediated agreement or suggest that Nancy litigate the divorce so she could obtain a better outcome for herself. The attorneys spent several months negotiating an agreement different from what was reached in mediation. Steve was anxious to complete the divorce process and gave in on many of the issues.
 
What started as a cost-effective, amicable process involving decision making to meet personal needs changed into a more adversarial and costly legal process that placed advocacy ahead of collaboration. Both Nancy and Steve became disenchanted with the mediation process and the attorneys.
 
As a divorce mediator, I encourage you to seek legal representation when it is important for you to have the legal support that I cannot offer as a neutral mediator. However, the choice of a review attorney…can greatly influence the process.

As a divorce mediator, I encourage you to seek legal representation when it is important for you to have the legal support that I cannot offer as a neutral mediator. However, the choice of a review attorney, as seen in the above example, can greatly influence the process.
 
No mediator can protect you from an experience like the one encountered by Steve and Nancy. On the other hand, there are some the steps I take to reduce the likelihood of an agreement reached in mediation being unraveled by review attorneys:

1. Make sure you are properly informed. 
   If you have consulted with an attorney before or during mediation, you were probably given legal information and perhaps even legal advice. Because I can’t be sure if you have consulted with an attorney, I provide a summary of the laws that would apply to your divorce if you had contested your divorce in court.
2. Resolve legal questions during mediation. 
   Understanding that there are laws that apply to a contested divorce, you may prefer to make decisions that are different from “what would happen in court.” This allows you to meet your specific needs in a way that works better for you. In some cases, and for perfectly understandable reasons, you may navigate toward wanting to better understand of how a judge would evaluate an issue. In those situations, I find it useful to refer you for a legal consultation, or I will engage an attorney to join the mediation session in a neutral capacity to discuss what a Judge would consider in making a decision.
3. Identify decisions that are likely to be “questioned” by a review attorney.
   When you make choices that may differ from certain norms (i.e., unequal division of assets and debts, or child support or maintenance that differs from state guidelines), I will ask you to think about how you would explain your reasoning for agreeing in mediation to make that decision.  My hope is that any question asked by a review attorney will have already been asked by me.
4. Provide referrals to attorneys who support mediation and self-determination. 
   You are always free to seek out legal advice from the attorney of you choice, but most clients are appreciative of referrals. My list of review attorneys is limited to attorneys who either offer mediation services as a part of their practice or are trained as collaborative attorneys.  

When you decide to mediate your divorce, you are acting on the principle that you can make your own decisions about how to end your marriage, which may include getting legal advice or a constructive legal review of the decisions you’ve made. With information, preparation, and legal assistance that respects the mediation process, you will be far less likely to suffer the fate of Steve and Nancy.

New clients often ask me what they need to do to prepare for the mediation process. There are two parts to the answer:
 

• Be ready to discuss content
• Be ready for productive dialogue

 
Preparing to make important decisions 
As a mediator, I want you to have as much information as possible to be ready to discuss all the important topics that will arise in a divorce mediation—whether those relate to your children, your assets and debts, or your financial needs.
 
I provide you with:
 

• a complete outline of topics typically discussed in mediation.
• a complete list of financial documents to gather and share (so there is full transparency and disclosure of finances). 
• legal information (especially important if you choose to come to mediation without engaging an attorney as a consultant). 
• examples of how a parenting plan can be structured.
• worksheets for budget planning.

 
Preparing for productive dialogue
Some clients, even though their marriage is ending, have the ability to conduct respectful and meaningful conversations on their own. However, many don’t. You shouldn’t be surprised if you’re uneasy about the prospect of having to engage in a challenging conversation with your soon-to-be ex. It could be difficult to talk about creating separate futures involving co-parenting, separating finances, and attempting to agree on arrangements for support to establish two financially sustainable households where the needs of the children are met.
 
You cannot control your ex’s thoughts, speech or behavior, but you can prepare yourself for mediation by raising self-awareness to help you be at your best.  
 
You cannot control your ex’s thoughts, speech or behavior, but you can prepare yourself for mediation by raising self-awareness to help you be at your best.  And if you and your ex are both more self-aware, that can help you to be more ready and focused on the quality of your dialogue in your mediation sessions.
 
As your mediator, I work with both of you, providing you with exercises in advance to promote greater self-awareness. Such exercises help you reflect on a number of questions:
 

• Your feelings about mediation… Why choose it over litigation? How will agreements be better reached in mediation? What are your concerns about the process?
• Communication with your spouse… What blocks you and your ex from having productive conversations? What do you think may be worrying your spouse as he/she comes into mediation with you? What is the status of trust in your relationship, and how do you rebuild trust? What model do you want to set for your children as you end your marriage?
• Your personal qualities… What are you core values? What process do you follow for making decisions? How do you express yourself and interact with others? How do you react to conflict?

 
Just as athletes exercise and train before they compete, this self-preparation can make you ready to move past the communication challenges of the past and reset yourselves for better conversations in mediation.

Often your most valuable asset, the family home is the focus of significant negotiations in most divorce mediation cases. This second installment on that subject looks at logistical factors you need to consider in deciding the future of that home. 
 
Note: Financial issues surrounding home ownership and sale during divorce can seem daunting. As an experienced mediator with decades of experience in finance and accounting, I offer my clients expert help in making sense of everything they need to understand to make thoughtful decisions about the future of their home. I urge clients to review and revisit the kind of information described below, note questions and comments, and allow me to guide them through the financial maze. Hopefully reviewing the major topics here will help you consider your own situation with greater clarity.
 
Can you refinance?
 
It is one thing for spouse A and spouse B to agree on who will keep the house, and they may even be able to agree on a value on the house, whether by appraisal or a number that both find acceptable. However, if you are going to buy your ex out (or vice versa) and you are both listed on the mortgage, chances are that the person not staying in the house will want to come off the mortgage to obtain their own future credit for another home purchase and avoid any residual liability for being listed on a mortgage that you’ve agreed to pay for. This means having to refinance the current mortgage and being qualified to do so. Your income and current debt will be significant factors in qualification, and any income from child support or maintenance will need to be paid for a minimum period of (usually) six months before an application for refinancing can commence. As a result some cooperation about an interim plan may be needed.
 
Before looking at a refinance, I suggest that you check with your lender about whether there is any possibility that you (or your spouse, if they are keeping the house) can assume the current mortgage in their name alone, meaning that the other spouse would be taken off the loan without any of the terms (like interest rate, especially if low) being changed. While not many lenders allow this, some do. Keeping a low interest rate (in a rising interest rate market) can be a huge monthly savings. On the other hand, assuming a mortgage will not give you the ability to obtain cash through borrowing for a buyout, so another lending source may be needed for the resources to pay your ex their share of the equity.
 
Transaction Fees
 
Refinancing is not inexpensive. The lender will have an origination fee, and there are other costs that will be encountered in a refinance. Lenders should be able to provide detailed estimates. Some costs can be included in the amount to be borrowed; others may need to be paid in advance or at closing. If the ownership of the residence will be transferred from joint ownership to you (or your ex), a deed will need to be prepared and filed. Transfer taxes on the property transfer may be levied, just as if the home had been sold to a third party. Many municipalities will not waive the transfer tax if the transfer is between former spouses. Some may waive the fees if the transfer takes place before the divorce is finalized.
 
How much is your home worth?
 
If you decide to sell your home, you can find out its value, as it will be listed on the open market. Hopefully, you will soon receive offers to sell at a price you can accept, which will represent the value of your home. Any realtor you work with will have done research to assist you in arriving at a good listing price.  
 
In a buyout, it’s not as simple. Since your home is not being listed for sale, no one will be making an offer. Most would agree that a professional appraisal (usually costing $300-$500) is an objective method for valuation. It’s also possible that the home was recently appraised for a refinance. Another option is to use a bank appraisal as the measure of value if the home is being refinanced.
 
What’s the right plan?
 
The mediation process will involve a thorough review of options and any additional research or obstacles to be overcome in deciding how to handle the family home. This information will give you the chance to develop a plan that best meets everyone’s needs.
 
The mediation process will involve a thorough review of these options and any additional research or obstacles to be overcome in deciding how to handle the family home. This information will give you the chance to develop a plan that best meets everyone’s needs.

In many divorces, the family home may be the most valuable asset. Unlike other financial assets, there is no practical way to divide a house!
 
In almost every mediation case, the choices are limited to these possibilities:

• You will keep the house.
• Your soon-to-be ex will keep the house.
• The house will be sold.

 
On the surface, it would seem simple to make one of these choices [about handling the family home], but often it is not. A number of factors can complicate the decision.
 
On the surface, it would seem simple to make one of these choices, but often it is not. A number of factors can complicate the decision.
 
Maintaining Stability for the Children
While one of you may want to sell the house, the other spouse may feel strongly about keeping the children from having to move away from where they have been living. This can become a difficult discussion if both spouses want to keep the house and live there with the children, as the other spouse may have a sense of being uprooted or otherwise being relegated to an inferior parental role.
 
Emotional Attachment
Depending on how long you have lived in your home, each of you may have made significant efforts to improve your home to fit your needs. Being asked to forego the opportunity to live in a home that you helped to create can stir up some strong emotions.
 
Financial Factors

• Can you afford to stay? As you transition from living together under one roof to maintaining separate residences, many find it challenging to keep up with the cost of the mortgage, utilities and other expenses on one income—even if supplemented by support payments being made to you by your ex. Depending on the duration of the support payments, a short-term plan that pays the bills may not be sustainable in the long term.
• Buyouts can be expensive. If you are going to keep the home, chances are that your ex will be looking to be paid their share of the equity, unless you have something else to trade (like retirement or investments). For many, the only way to get the equity to the other spouse is to borrow more money to pay off your ex’s share of the equity in the home you are keeping (and this means higher monthly payments).

 
Flexibility Factors

• Transitioning. Unless you are going to sell the house immediately, there will be a period of time where the current ownership and mortgage will remain the same.  This situation requires discussion about how long a transition is acceptable to both of you (which often means, how long is someone willing to stay on a mortgage for a home where they are not living). Transitions may be a matter of months, so some decide that they will stay on the mortgage together for a longer period of time, to help the other spouse build credit and so as not to uproot the children.  
• Planning for Contingencies. This can often be equivalent to asking “what if?” For example, perhaps you and your soon-to-be ex decide to stay on a mortgage for a period of three years, but one of you asks what would happen if that arrangement isn’t workable any longer. You can always set a minimum period of less than three years (to give time to the person who has to refinance), after which either spouse can terminate joint ownership by requesting a buy out or a sale. Similarly, there may be a plan for you to get bought out by your spouse.  You may ask, “What if they can’t refinance by the time I want to be off the mortgage?” There can always be a fallback plan to put the house on the market if refinance can’t be completed in a specified time.

​Watch for the second installment of this discussion!

On many levels, there is much to decide when you are ending your marriage. In broad terms, you need to come to agreement on the parenting arrangements for your children and on creating a financial settlement that you both find acceptable—relating to the division of assets and debts, and meeting financial needs of two households and the children into the future.
 
When it comes to parenting arrangements for your children, the plan you create now, involving parenting-time scheduling in particular, may need to shift, based on changes in your work schedules and other factors involving the children’s needs. Therefore, most parenting plans will include provisions for you to renegotiate your parenting arrangements, whether on your own or by returning to mediation, instead of getting the courts involved.
 
Similarly, in discussing the financial support of children (child support) and of a lower-earning spouse (maintenance) in mediation, a question often arises about how amounts negotiated at the time of divorce can be changed later. While the law provides some ability for financial support to be modified in court if the change of financial circumstances is “substantial,” seeking a court modification can be cumbersome and expensive.
 
The mediation process allows you to decide, on your own terms, what would be considered an agreed-upon reason for changing the amount of support being paid, and how the amount of the change will be calculated. This will save you the time, effort and cost of filing for modification in court, and provide some certainty over how this often-sensitive topic will be addressed in the future.
 
Sometimes, when the topic of division of assets and debts is being discussed, one or both of you may want to postpone a decision until later. An example of this would be what happens with a jointly owned home. I have been asked on numerous occasions about postponing a decision on the family home until some future point in time. On the surface, this strategy isn’t consistent with the concept that your divorce agreement (for asset and debt division) is intended to be a “final” settlement. For most assets and debts, it is expected that your settlement agreement will address this once and for all—meaning there is no turning back for renegotiation. As I’ve been told by many attorneys with whom I work, this is what any judge would expect when approving the agreement.
 
…. Using the example of the family home, the mediation process can offer creative options to address the need for certainty while at the same time providing time and space for a later decision through a well-defined procedure.
 
However, using the example of the family home, the mediation process can offer creative options to address the need for certainty while at the same time providing time and space for a later decision through a well-defined procedure. Here is one such approach:
 

• Spouse A and spouse B continue to jointly own the family home for a specified period of time. (Defining the deadline for ending joint ownership is critical, and in some agreements, spouse A or spouse B may be given the option to provide early notice for termination of joint ownership.)
• When the deadline for joint ownership is reached, spouse A has the option of buying out spouse B’s equity in the family home. (In some agreements, either of you may have that option, in which case it should be decided which of you has the first option.) This provision would also address the terms of the buy out.
• If neither of you wants to buy out the other’s interest in the family home, it would be sold.

 
While no decision about the ownership of the family home is made at the time of the divorce, what is described above is a complete plan for how the equity will be divided at a specific time in the future.  
 
Making creative choices that provide certainty now will allow you to move on with your life journey. Mediation can help that happen.

The divorce mediation process offers you a unique opportunity to engage in a meaningful dialogue with your spouse. As a neutral third party, I am there to assist you, so that, together, we can develop a plan for your separate futures. As your mediator, I provide you with tools so that you are both prepared to participate effectively in mediation discussion.
 
How to prepare for divorce conversations? Information—both provided by me and gathered by you—needs to be at your disposal. You can also prepare by coming into the mediation process with a clear mindset and focus, enabling you to speak, be heard, and hear the voice of the other.
 
How to prepare for divorce conversations? Information—both provided by me and gathered by you—needs to be at your disposal. You can also prepare by coming into the mediation process with a clear mindset and focus, enabling you to speak, be heard, and hear the voice of the other.
 
On an emotional-level and a thought-level, preparation involves knowing what most matters to you and what you see as the challenges that may impede achieving your short- and long-term goals.
 
As you contemplate priorities for your future, I encourage you ask yourself some simple questions:
 

• Does it matter if this happens or not?
• How much does it matter (in other words, what kind of priority is this for me)?
• What are the consequences to me (and/or our children) if what I am seeking doesn’t happen for me in our discussions?
• What will be my role in making my future happen? (Can I do this myself, or will I need help from my soon-to-be ex-spouse?)
• What could my soon-to-be ex spouse do to help me achieve my goal, and how could they (and/or our children) benefit from contributing to my future success?
• What will be better in my life (and the lives of the children) if I can make happen what is important to me?

It’s always helpful to remember that meaningful dialogue goes in two directions. Just as you should be prepared to express yourself about what’s important, why it’s important, and plans you can suggest to make it happen, you should also prepare yourself to listen to your spouse, who will be sharing the same set of thoughts on their own behalf.
 
By helping you both stay focused on sharing thoughts, ideas and options, and by encouraging you to be open to what each other is saying, the mediation process can create a platform of understanding. Then learning can take place and create a foundation for constructive planning and decision making. 

One of the many challenges faced in households, whether one-parent or two-parent, is managing the cost of childcare.
 
Fortune magazine reported earlier this year that, during the pandemic, average daycare costs have increased by 41 percent, which is far above the overall rate of inflation. Obviously, this challenges household budgets.
 
Interestingly enough, I currently work with a client who owns a childcare facility. I’ve learned from that client that, like many employers, finding quality employees in the current economy has been extremely difficult. The balance between paying enough to keep good employees and ensuring financial survival for the business without raising costs is very hard to manage. Business owners know that customers can only afford so much in cost increases.
 
In the case of divorcing parents, there is recognition that parents have to work, and, in order to do so, the issue of how to pay for childcare must be addressed.
 
In the case of divorcing parents, there is recognition that parents have to work, and, in order to do so, the issue of how to pay for childcare must be addressed. For many families, this is a changing dynamic, as many had chosen for one parent to remain at home to help raise the children while the other worked. In my mediation practice and among those parents of young children whom I know, it’s no longer exclusively a mom’s job to stay at home, although, admittedly, there are still significantly more women than men who do so.
 
In most divorce mediation cases, the budget to support two separate households will no longer stretch far enough on one income. In two-income households that could once afford the cost of daycare (or a dedicated childcare provider, like a nanny or au pair), the establishment of a second household often unbalances the financial equilibrium once in place.
 
Our legal system has a straightforward way of addressing these challenges, namely, to declare that childcare costs allowing parents to work should be divided in proportion to the parents’ incomes. For some families, especially those who prefer to have the law decide the question, this provides certainty of the outcome, but may not address the overall challenge of supporting two financially sustainable households.
 
In divorce mediation, we can take the time to evaluate different options that can include both how to fill the need for childcare and how to address the costs.  Given the opportunity to use their own creativity, many parents rearrange work schedules to be available for their children during their designated parenting time. In some arrangements, parents are creating their own financial incentives by agreeing to take on the cost of childcare during their respective parenting time, with the understanding that, if they can adapt their work schedules, they can individually save on childcare costs.
 
Creative childcare arrangements are just one example of how mediation can help you see a challenge as an opportunity to develop an innovative solution, in partnership with your co-parent.

On many levels, divorce is a transition. One day you are living with someone you once thought you’d spend the rest of your life with, and the next day that person is living elsewhere.

One or both of you were working to pay the bills and save for the future, but that has changed. Each of you is now financially responsible for your own residence, doing it on your own income, with whatever support you are receiving from your ex. If you are the one paying, your income is now reduced to help your ex.

Perhaps the most difficult transition for some is realizing that your family routine has changed. Specifically, you probably don’t see your children every day, because they are living in two separate households.

Regardless of how you divided responsibility for the care of your children while you were married, divorce requires some big adjustments.

The Mediated Parenting Plan

In mediation I begin with these acknowledgements: You, as parents, have your past parenting experience to help guide you in planning for how you will co-parent your children after divorce. Also, while not able to sustain a marriage, many of you will recognize that you have done a good job at parenting and are raising your children to be responsible and successful adults.

When I am helping parents to create a parenting plan for their future in two households, I begin with these acknowledgments:

1. You, as parents, have your past parenting experience to help guide you in planning for how you will co-parent your children after divorce.
2. While not able to sustain a marriage, many of you will recognize that you have done a good job at parenting and are raising your children to be responsible and successful adults.

​There is emotional turmoil in divorce, and even reluctance to accept that your children will most likely not live with you 100 percent of the time. Still, a thoughtful parenting plan, developed in mediation, is an important first step in creating a healthy transition for your entire family.

Envisioning Your Children as Adults

In the early part of mediation, I ask you two simple questions to help keep you focused on your children’s future amidst the changes you are experiencing:

1. Envision your children as young adults who reflect your hopes and dreams for them. How would you describe them?
2. Between now and the time your children are grown, what can you do as parents to help them to become the young adults you envision?

This introduction to a visioning process for children can lay a foundation for constructive co-parenting, where you can determine how decisions are made, how time will be allotted between parents, and the co-parenting guidelines for communicating and setting expectations.

More Things to Consider

Here are a few other issues to be mindful of, as you think about how to manage the changes in your parenting process:

1. The roles of each of you as parents while you were married may shift as you each become responsible for the care of your children when they are with you. I’ve seen many parents who seemed less involved with their children step up and take more responsibility to ensure that they will remain an important part of their children’s lives.
2. You can remain united as parents in guiding your children even if you are doing so from separate households. Children have an uncanny ability to appeal to one parent after being refused something from the other parent—this happens in two-parent households as much as in one-parent households. Your children will benefit if you are cooperative and consistent instead of competitive.
3. Parenting in a single-parent household is hard. If you can each build in some time for yourselves, you will get the break you need to recharge and refocus. Together, you can give your children the benefit of rested and engaged parents.

Unlike the court system, where a judge has to referee and decide for parents how they will move forward, mediation offers the chance for you to set your own rules and expectations for co-parenting. When you do this well—and I assure you that many do—your children will carry with them the memory of parents who navigated a difficult transition with love and concern for their well-being.

In our best version of ourselves, we can be not only self-aware, but also prepared to listen carefully in a non-judgmental way to what others are saying. In conflict situations, however, it’s a significant challenge to be at our best and be open to what others are communicating.
 
When a marriage is ending, the roots lie in conflict between the spouses. In some cases, that conflict can be extreme, including abusive behavior and actions. More often, difficulty exists in a more subtle yet significant form between clients I work with as a divorce mediator.
 
As I learn from those who have studied and written about conflict theory, I am recognizing my own reactions. When I find myself in a conflict situation, my behavior is shaped by a defensive response to what I am hearing, interpreting it as a threat to something that matters to me. I respond with defensive statements; often this will set off the same triggers in the other person. This cycle is a major barrier to meaningful communication.
 
Using this knowledge, I am deepening my own understanding of what impedes your engaging in meaningful dialogue that will support making the important decisions surrounding your divorce.
 
The mediation process creates a unique opportunity for a conversation in which I can help you understand each other better and avoid the possibility of mistakenly interpreting the behavior of your spouse as a threat to what is important to you.
 
Most are looking to find the quickest and easiest path to ending a marriage, but the enormity of the decisions plus underlying conflict may obstruct this goal. The mediation process creates a unique opportunity for a conversation in which I can help you understand each other better and avoid the possibility of mistakenly interpreting the behavior of your spouse as a threat to what is important to you.
 
By exploring what matters to you and how you see this being challenged, you are available to a deeper conversation in which there will be less need to defend and more chance to acknowledge each other’s priorities. Then you can address the gap between the message intended by the speaker and the message heard by the listener. 
 
Listening can be hard. The mediator’s job is not only to be a good listener, but also to help clear the roadblocks so that you are a better listener. With listening and understanding, the foundation is set for progress.