According to a BC group that helps couples untie the knot, divorce rates are up about 30% globally as a result of lockdowns, quarantines, and working from home pushing couples to their limits.
If you know of someone who is in the unfortunate position of filing for divorce during this time, we can certainly help! We have several mortgage solutions to help you solve the house and the mortgage during the divorce or separation process.
You have three options:
1. Sell the house off, split the proceeds from the sale or split the shortage – Most often this is a solution to sell off the property and remove both names from the title and the mortgage. This may not be the best solution if there is a large penalty on the mortgage or little/no equity in the home. When considering selling, also consider other costs such as lawyers fees, realtor’s commissions, and penalties to discharge the existing mortgage.
2. One spouse stays and the other transfers their title – This is one of the best alternatives to selling the property as there are no commissions to be paid to sell and no penalties to be paid to the bank. Not all mortgages have this option, however, once there is a separation or divorce agreement and as long as the spouse who wishes to stay qualifies on their own or with a new co-borrower, this process can be the path of least resistance.
3. One spouse stays and refinances to buy out the other – You both have accumulated a large amount of equity together in the home, therefore walking away may not be an option but maybe it is important to keep the house for your kid’s sake etc. As long as one spouse (or together with a new co-borrower) qualifies, they can refinance the existing mortgage to take out equity and remove the other spouse from the title and the mortgage. Penalties may apply to discharge the mortgage depending on the stipulations of the mortgage.
To qualify to purchase a home after a divorce or separation, our lenders will extend mortgage financing once you have a divorce or separation agreement. Receiving child or spousal support can help increase the amount you may qualify for. Please contact us and let us help you through the mortgage process.
