Aside from the emotions involved with a separation, there are several things to consider and act upon relative to your current mortgage.
The first important step is to finalize the separation and get an agreement together. This important document outlines how your assets will be divided and how other important financial decisions will made.
There will be two clear paths to take in your housing: 1. will you be buying a new property; or, 2.will you stay in the existing home?
In the event of a new purchase, things to consider include:
- Will you be keeping or selling the existing house?
- What can you afford relative to your current financial situation? (getting pre-approved is essential and will help you with this decision)
- Will one of you be coming off the title of your matrimonial home (should either of you keep the existing residence)?
- How will you secure a down payment for the new property?
If you are staying at the existing home these things should be considered:
- Can the equity in the property be used to consolidate joint liabilities?
- Is there enough to provide a payout if there is one in question to the other party?
A mortgage professional can work in partnership with your lawyer to help navigate whatever scenario you’re in. I’ve helped many people build their new financial future sometimes from scratch. Often debts can be a dispute, but regardless of who pays the bills it’s important to maintain a good credit history. If your ex. decides not to pay some of the credit cards or lines of credit on time it will have a negative effect on your credit history and will affect your ability to get good mortgage financing.
If you’re in a situation where you will be keeping the matrimonial home and buying your ex. out of the house there are ways to refinance your property to 95% of the value. This is normally unavailable in a traditional refinance. However through a separation or divorce equity can be accessed if an agreement of purchase and sale is drafted. This is program that’s offered through all Canadian mortgage lenders as a program through CMHC or Genworth Canada.
Please contact me if you need help navigating this often difficult situation. We have the experience and expertise to move you ahead with your new life.