What Are Spousal Buyout Mortgages?
With almost 50% of marriages ending in divorce, it’s essential to have options when it comes to keeping the principal residence and separating financial affairs fairly. If you and your spouse or partner are considering a separation, and either of you would like to keep the house and buy out the other’s equity in the property, you have the option of “spousal buyout mortgages.” With the help of this mortgage, you can take complete ownership of the house and settle your dues with your ex-spouse.
How does it work?
Spousal buyout mortgages allow one spouse to keep the principal residence and avoid moving while enabling them to increase their access to equity or cash to pay out the ex-spouse’s interest. The mortgage applies to common-law partnerships and joint family purchases, where the relationship has broken down, and the parties need to break financial affairs.
With spousal buyout mortgages, several lenders provide a mortgage which allows the spouse staying in the residence to obtain up to 95% of the Loan-to-Value, and the transaction is structured as CMHC (Canada Mortgage and Housing Corporation) Insured. To know how much you will qualify for, use a mortgage qualifying calculator. It will also help you to determine affordability and which mortgage is right for you.
How to acquire a spousal buyout mortgage?
An application for a spousal buyout mortgage will require the following criteria:
1. The spouse-to-stay must be able to afford the mortgage on a sole income.
2. Both the spouse-to-stay and ex-spouse must be on the deed to the property.
3. A legal separation is required and must cover the equity for a spousal buyout, debts, and other costs.
4. The spouse moving out of the principal residence must be taken off the deed to the property.
To avail of a spousal buyout mortgage or learn more, give me a call at (519) 240-1062. As your mortgage broker, I can set up a personal meeting and discuss your options further.
I have over twelve years of experience as a mortgage broker in Cambridge, Ontario. During this time, I have successfully assisted clients with home purchases, mortgage refinances for debt consolidation, mortgage refinances for home renovation or investment, mortgages for the self-employed, investment properties, vacation or second home properties, mortgages for those with past or present credit problems, and commercial mortgages.