Keeping your financial house in order through separation or divorce
If you’re going through a divorce or separation, it’s understandable if you feel overwhelmed. It’s important to get help so you can make confident and informed decisions as your life changes.
There are some common issues that individuals going through a separation or divorce ask us about. Take a look and let us know if you need more information. We’re happy to help, fee-free.
"I really don’t want to move out of my home. Will I be able to keep it?"
Consider that your household income will likely decrease, but the costs of running your home will not. You’ll need to do a careful assessment of all the monthly bills, including the mortgage, taxes, insurance, maintenance, utilities, etc.
Need help? One of our Mortgage Agents would be happy to help you review your expenses and see if you would qualify to keep your home based on your anticipated income.
"What do I need to think about to buy out my spouse/partner’s share in the house?"
To calculate the value you would owe, take the appraised value of your home minus the costs of selling (commissions, mortgage and closing costs). Split that amount based on how net family property is being divided. You should speak to a lawyer (if you haven’t already) about how assets are being divided.
There are a few options for buying out your spouse or partner:
- You can borrow up to 95% of the home’s value to pay out your spouse.
- You can refinance the home up to 80% of its value, get a second mortgage or use other assets to pay out your spouse or partner.
- You can usually qualify for a loan without your spouse or partner’s income. Keep in mind that lenders usually consider child support or alimony as stable income, with the proper paperwork in place.
It’s very important that you speak to a lawyer about your options before making decisions or commitments.
Need help? We can suggest an appraiser to provide an unbiased assessment of the value of your home. We can also help you assess your financing options and apply for financing.
"My spouse/partner lives in the house so I don’t have a mortgage to pay now."
You may have already registered a Transfer/Deed removing yourself from the title of the property. However, this does not take your name off of the mortgage. This means your credit history will be affected if payments are not made (even if you and your spouse/partner have agreed they will make the payments). It is important to make sure your credit history isn’t affected by missed mortgage payments.
You can call the lender and ask to be released from the mortgage. This will leave the mortgage in place, but means you will not be obligated on the loan anymore.
Alternatively, you could look at refinancing.
Need help? Give us a call and we can help you understand both options and talk you through the process.
"When can I buy a new home?"
If you’re still listed on a mortgage with your spouse/partner or are awaiting finalization of your divorce, it may be possible to buy a new home. But it’s not always advisable.
Here are just a few things to keep in mind:
Until you have a separation agreement or divorce judgment, you cannot be absolutely certain of your financial situation.
Child support or alimony must be properly documented if you plan to use them for qualifying for financing.
If your name is still on the mortgage for the property you owned with a spouse/partner, you’re still liable in the eyes of the lender and credit bureaus. You would have to qualify for a new mortgage with the full debt from the current mortgage.
Need help? We can review your situation based on how you expect the financial situation to finalize and give you an idea of how much financing you could qualify for.
We’re happy to help
When you’re dealing with a breakdown of your marriage or long-term relationship, it’s understandable if the last thing on your mind is your finances. But avoiding financing questions can make for trouble down the line. We would be happy to help smooth the path – fee-free – so you can start preparing for a worry-free future.