Divorce & Separation Mortgage.
Divorce & Separation Mortgage
This is not exactly the most pleasant experience for anyone to endure. A whirlwind of emotion and confusion are likely the least of your worries. You start to think of your home, the mortgage, and the equity. We most often experience the following scenarios:
i) You and your no-longer partner opt to sell your matrimonial home. You apply the sale proceeds to pay-off the existing mortgage, and you will each net your respective portions. You will each use your net advance as a down-payment for your new purchase(s).
ii) You agree to have your partner remain in the matrimonial home, and to have yourself removed from title. Your partner will either need funds available to pay you off, or, arrange a mortgage to pay you your share of equity. You will use your equity to purchase a new property.
Unfortunately, obtaining a mortgage for a divorce or separation may not be as simple as the mortgage obtained when you bought your matrimonial home. There is a possibility that the spouse remaining on title does not have sufficient income to service the mortgage and housing expenses. Alternatively, it could be a credit issue. In this case, you may need to sell your property, take your equity share, and downsize. In some cases, it might be wise to temporarily rent until your income or credit reaches a sustainable level for the most favourable borrowing terms. In the most difficult case, there is insufficient equity in the home, at times, negative equity. This means that you cannot sell the property yet and must continue paying down the mortgage to increase the equity. If this is the case, we suggest renting your property to accelerate your cash availability which can be used to pay-off your partner.
In most cases, a mortgage and separation mortgage is very easy to obtain, so not to worry.
At DV Capital Corporation, we uphold relationships with mortgage lenders that have flexible income, credit, and debt servicing requirements. In addition, we can help you with a mortgage approval if your property is located in a rural location. Also, we work with lenders who can approve you simply based on home equity. If you are self-employed and showing less income on paper, we have a program for you. You do have mortgage options!
Just a heads up that your mortgage lender will require a copy of your separation agreement or divorce decree. As nasty as this document is, and as much as you want to burn this, please keep this handy.
We will be happy to provide you with additional information and support when you’re ready.