DIVORCE

Splitting up with a partner can be one of the most trying periods of your life and emotional upheaval can be increased by the logistics of dividing a major asset such as a home. 

Generally speaking, marriage is seen as an equal partnership in the eyes of the law, so for the most part, anything that has been acquired during your marriage and that you still have ownership of at the time of separation, must be divided equally.

Options:

  • One party keep the home and refinances
  • One party keep both the home and the mortgage
  • Selling your home

One of the first things that you need to do is to use a realtor for a preliminary market valuation or hire an appraiser who could provide you with a detailed evaluation analysis of your home and how much its worth. Once you have this value, subtract the outstanding balance owed on the mortgage, and you will get to the current amount of equity in your home. We will be able to assist you with this process as well.

One party keep the home and refinances

If one of you want to remain in the home, you and your ex-spouse can request to have the mortgage refinanced.  In most cases there’s a buyout, so the one who remains in the home, has to raise more money to pay the other party out.  The individual keeping the home, must meet certain criteria, which proves they can manage the mortgage debt on their own.

 

One party keep both the home and the mortgage

This option is always a possibility, but maybe not the ideal solution.  As a couple, you will have to fully declare the mortgage payments and other house related costs on any future loan or credit applications.  This could prevent you from receiving another mortgage, thus hindering future financial needs. 

 

Selling your home

This will probably the simplest option if you or your ex-spouse wants to remain in the home.  You will be putting your property on the market exactly the same as if you were selling it for any other reason.  Once it sells, you split the proceeds with your ex-spouse, and both find new housing.  This option is the most clear-cut option, since you’re not changing the mortgage itself. It will be a clean break for you both. 

 

Being responsible with your finances during this time will give you access to the best possible options when it comes to splitting the mortgage, so don’t delay, contact our mortgage brokers to assist you with your choices.