What Happens to your Marital House when you Divorce?
If you happen to be going through a separation or divorce, you need to be aware that there are mortgage products designed specifically to allow you to refinance your home in order to buyout your, soon to be ex, spouse.
Most couples home is their largest investment and asset, and is where the majority of their equity lies. In the case of marital split, it is possible to restructure your mortgage to make buying out your spouse an option. In some cases you will be able to refinance your home up to 95% of the appraised value.
Have a few Questions about this product? This FAQ might help?
Is a finalized separation agreement required?
Yes. In order to qualify, you will require a copy of the signed separation agreement with the details of the asset allocation clearly outlined.
Can the net proceeds be used for home renovations or debt repayments?
Unfortunately not, the proceeds can only be used for the purpose of buying out your spouse unless the debt repayment is mutually agreed upon in the finalized separation agreement.
What is the Maximum amount that can be withdrawn?
The maximum equity that can be withdrawn is the amount agreed upon in the separation agreement without exceeding 95% loan to value (LTV).
What is the Max LTV permitted?
The maximum LTV is the lesser of 95% or the Remaining Mortgage + Equity required to buyout spouse and/or pay off debt (which cannot exceed 95% LTV but may be lower than 95%).
Do all parties have to be on Title?
Yes, all parties to the transaction have to be current registered owners on title. The solicitor will be required to do a title search to confirm.
Do the parties have to be married or common law partners to qualify?
No any two (or more) parties on title can apply for this product as long as they have insurer approval. Since there won’t be a separation agreement, there is a standard clause that can be included in the original purchase contract that outlines any future buyout.
Is a Full Appraisal Required?
Yes, since this product is similar to a refinance, or a private sale, a full physical appraisal is required on the home/property to asses true valuation.
If you have any questions about whether you qualify or if this product is the right option for you, please feel free to contact me any time, I’m always happy to help.
Meghan Van Houten – Mortgage Agent
416-709-9062
meghan@mountainviewmortgage.ca
Mountainview Mortgages
5038 Fairview Street, Burlington, ON L7L 0B4
Independently owned and operated
Lic# 12568
