DIVORCE AND YOUR MORTGAGE:
Here's What You Need To Know.

Divorce Booklet
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Divorce and separation are extremely common in Canada. In fact, the divorce rate for married couples is over 50 percent. When couples get divorced or separate from each other, there are many financial questions that must get addressed. One of them is what to do about dividing property.

When you have been living with someone for a very long time, it is common to have your finances intertwined with each other, sharing the responsibility in most, if not all, loan repayment. This can include mortgage payments, student and car loans, property taxes, and so on. If you are currently in this situation, you may also be wondering if you should just sell the home. 

Fortunately, there exist spousal buyout mortgages which are insured through Canada Mortgage and Housing Corporation and Sagen that could allow you to buy your spouse out of your matrimonial home and live comfortably on your own. By applying under these programs, you may be able to qualify for a great rate, an excellent mortgage product and have the ability to borrow up to 95 percent of your property’s current value. You may also be able to pay off joint debt, consolidating costly lines of credit that may be secured or unsecured at much higher interest rates.

These programs ultimately offer secure mortgage options that can safeguard your financial obligations and future. 

In order to qualify for the spousal buyout program, it is important you obtain legal advice and have a duly signed Separation Agreement. The agreement should outline who will be paid out and for how much along with other costs like child support,  for example.  

As a mortgage professional, I can help you figure out your Separation and make sense of it all right from the drawing board. I can also help you spare your credit rating which will be essential when going through the Separation process. 
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A mortgage broker can help simplify your life when you need simplifying the most. Please feel free to download my Divorce Booklet which is located at the top of this page.

Here are some popular reasons:

• Maintain optimal credit during a costly divorce or separation.
• Include other liabilities which cost more money into one    new mortgage such as credit cards, unsecured lines of credit , student loans, etc. , which can help you save thousands. 
• Access funds to help with legal costs and the costs associated with your spousal matter. 

Can the net proceeds of a spousal buyout be used to pay out loans or other debts?

No, under the spousal buyout program the funds must only be used to pay out a spouse what is agreed upon pursuant to a Separation Agreement.

What is the maximum amount of mortgage money that can be withdrawn?

The maximum amount of mortgage money that can be withdrawn is the amount set out in the separation agreement.  This amount cannot exceed 95 per cent of the appraised value. 

Is a full appraisal required?

Yes, a full appraisal will most-likely be required to confirm property value.  Sometimes, if there is substantial equity in the property, an appraisal may be waived based on lender's discretion.