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The end of a relationship does not necessarily mean that you will have to sell your home. Your home may be able to give both partners a new start.
There have been many changes at the mortgage insurers. One being that they will now only allow a refinance up to 80% of the value of your home and this may be sufficient equity to pay off joint debt and provide a payout to the other spouse but this may make it difficult for those who are separating or divorcing as there may not be sufficient equity in the home to settle at 80% so they think that the only option is to sell the home.
There is a program available that could help you stay in your home in the event of a separation, divorce or dissolution of a relationship by purchasing the home from your ex-spouse or partner for up to 95% of the home’s value.
To qualify for this program you must be able to afford the mortgage payment on your own along with your other liabilities. Not only must the lender approve your application but also a mortgage insurer. Both parties must also be on title on the home prior to the separation.
There are some differences between two of the programs.
With CMHC the funds can only be used for a spousal buy-out or the dissolution of a relationship. This could be friends, relatives, etc. There cannot be any matrimonial debts or pre-payment penalties or fees included in the new financing.
With Genworth Financial the funds can only be used for a spousal buy-out and no other relationship breakdown but the new financing can include matrimonial debts if they are listed on the separation or divorce agreement. They will also allow pre-payment penalties and fees to be included.
It’s so important to seek the advice of a mortgage broker very early in the process as we can guide you along the way to a successful separation so you can both have the best possible outcome going forward. If you already have a separation agreement in place we can show you how the value in your home can make it work out for you both.
If you have any questions on this program please give me a call at 250-826-3543 or email [email protected]. All inquiries are kept strictly confidential.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
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