Our spousal buyout program can help you stay in your home and begin the journey to your independence.
We all assume marriages will be forever but unfortunately fairytale endings are not always the case. We know the statistics and felt it was important to help make the process less stressful for those going through a divorce.
Housing is often a big issue when it comes to dividing assets in a separation. There are generally three options when it comes to dividing housing. You and your ex-partner can sell the home and split the equity to each buy new homes. You can pay out your spouse if you have enough cash or you can choose our spousal buyout program.
The spousal buyout program allows you to keep the home you are currently in and helps your family stay comfortable and secure during the separation transition.
How does a spousal buyout work?
The program can help payout your spouse, as well as provide an opportunity to pay off other debts outside of the separation. If you are in the process of a legal separation, we can provide you with a new mortgage or loan solely in your name, up to 95% of the value of your home. This allows you to be responsible for the mortgage and remove your ex-spouse from the deed and the mortgage. A divorce buyout mortgage also allows you to bring on a cosigner if you are not able to afford the mortgage with your sole income. The cosigner can be a family member or new partner.
Our program is backed by all three of Canada’s mortgage insurance providers, Canada Mortgage and Housing Corporation (CMHC), Sagen, and Canada Guaranty.
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How much does it cost to buy out a spouse?
It depends on the value of your home and how much is left to pay in any current mortgage loan. With spousal buyout, you will be getting a new mortgage for the portion of the house that is not paid off and the equity that your spouse has in the home.
For example:
If your home is worth $350,000 and you have an outstanding mortgage balance of $100,000, you and your spouse would have $250,000 in equity. This means you would have to buy them out of their half of the equity, which is $125,000 in this case. However, you may arrange a different payout amount based on the separation agreement.
In this example, the new mortgage in your name along with any cosigners would be $225,000 (mortgage balance added to spousal buyout). If there are other debts to be paid to your spouse in your separation agreement, the spousal buyout mortgage can be used to pay that off as well.
What do I need to start the process?
If you would like to buy out your spouse, we do require some documents in order to complete the new mortgage approval. Your spouse must agree to the buyout in order for you to payout what is outlined in the separation agreement. The documents that we will have to review are:
- Signed separation agreement
- Employment Letter
- Most recent paystub
- List of debts you wish to payout along with the spousal buyout
We are here to guide you through every step to make this process as pain-free as possible. Our program allows you to keep your home and allows your kids to surround themselves with their friends while continuing to stay at the same school during the difficult transition.
Get the fresh start you have been looking for and contact a mortgage broker today.