Buying Out Your Partner With A Mortgage
The following information is provided as a guide to buying out your partner in a mortgage. The process can be complicated; you should always seek legal advice from a lawyer or certified financial planner before attempting to buy out your partner in a property.
There are several reasons why one partner would want to buy the other partner out of their share of property. For example, you may want to raise a family and need to buy out your partner’s share of the home. You and your partner might also want different living conditions (e.g., one spouse would like to remain in the home and the other wants to move elsewhere).
In Canada, there are two ways to handle a property buyout. One way is to mutually agree on who will buy out the other person and on how much they should pay. The alternative is to have one partner take over responsibility for the mortgage completely, including any loans attached to it (e.g., home equity line of credit).
The following information outlines how you can buy out your partner in a mortgage.
You and your spouse cannot make any changes to the home’s title without each other’s consent (i.e., you both need to agree on how the property will be handled). Once you've decided that you want to buy out your partner in a mortgage, begin by working with your bank or financial institution to find out how much will be required. You need to know what your outstanding balance plus interest is so you can determine the amount of money you'll need to pay your partner in order to buy them out.
If you cannot afford to pay all of the remaining mortgage, but want to take over complete responsibility for it, you can apply to the court for approval. If your partner is in agreement with the buyout, you will not need to go through this process.
Once you've agreed on how much your spouse should be paid or if the court approves your application, speak with your bank or financial institution about how to complete a spousal buyout. The institution will send you a letter of offer, which outlines the terms and conditions, including how much money you need to pay.
After your partner receives payment or if they decide not to buy out your share in the home, they must sign over their rights as a co-owner to the property. This can be done through a quitclaim deed or a co-ownership form. You should keep this document in the event that your partner dies, as it will help to determine their share of the property.
Both spouses must also sign another letter of offer from the bank or financial institution confirming that they are no longer responsible for paying on an outstanding mortgage on the house. Once you have both letters, you can apply to have the property’s title changed from joint tenancy to just one name.
Contact me today for further advice on buying out your partner in a mortgage. It is important that you consult with a lawyer before applying to have the property’s title changed from joint tenancy to one owner's name.
There are several reasons why one partner would want to buy the other partner out of their share of property. For example, you may want to raise a family and need to buy out your partner’s share of the home. You and your partner might also want different living conditions (e.g., one spouse would like to remain in the home and the other wants to move elsewhere).
In Canada, there are two ways to handle a property buyout. One way is to mutually agree on who will buy out the other person and on how much they should pay. The alternative is to have one partner take over responsibility for the mortgage completely, including any loans attached to it (e.g., home equity line of credit).
The following information outlines how you can buy out your partner in a mortgage.
You and your spouse cannot make any changes to the home’s title without each other’s consent (i.e., you both need to agree on how the property will be handled). Once you've decided that you want to buy out your partner in a mortgage, begin by working with your bank or financial institution to find out how much will be required. You need to know what your outstanding balance plus interest is so you can determine the amount of money you'll need to pay your partner in order to buy them out.
If you cannot afford to pay all of the remaining mortgage, but want to take over complete responsibility for it, you can apply to the court for approval. If your partner is in agreement with the buyout, you will not need to go through this process.
Once you've agreed on how much your spouse should be paid or if the court approves your application, speak with your bank or financial institution about how to complete a spousal buyout. The institution will send you a letter of offer, which outlines the terms and conditions, including how much money you need to pay.
After your partner receives payment or if they decide not to buy out your share in the home, they must sign over their rights as a co-owner to the property. This can be done through a quitclaim deed or a co-ownership form. You should keep this document in the event that your partner dies, as it will help to determine their share of the property.
Both spouses must also sign another letter of offer from the bank or financial institution confirming that they are no longer responsible for paying on an outstanding mortgage on the house. Once you have both letters, you can apply to have the property’s title changed from joint tenancy to just one name.
Contact me today for further advice on buying out your partner in a mortgage. It is important that you consult with a lawyer before applying to have the property’s title changed from joint tenancy to one owner's name.
Popular Reasons People Buy Out Their Spouses
- 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.
Paying Out Debt With a Spousal Buyout Mortgage
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.
Access Up To 95 Percent of Your Home's Value To Complete A Spousal Buyout
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.
