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Divorce assets and a family home. how spousal buyout mortgage Program helps.
division of divorce assets and help with a spousal buyout mortgage
Divorce assets include a family home. Division of property in divorce is one of the most difficult tasks couples go through during matrimonial divorce or common-law separation. Thankfully, the real estate financing has stepped up to the table with divorce and property division spousal buyout mortgage programs for separating spouses.
What will happen to my house?
What will happen to my house when we separate Jennifer asks. I understand, spousal separation causes fear, confusion, uncertainty and it can be overwhelming. Jennifer is a teacher with salaried income and needs a mortgage broker Grimsby area to help her with a spousal buyout mortgage. She loves her townhouse, her children are settled in a good school and she wants to get through the tough days without mistakes.
I understand that the divorce and property division is a painful process. My goal is that Jennifer and all other clients dealing with their matrimonial home get dedicated home mortgage help to reduce some of their marriage breakdown anxiety.
Today, the mortgage markets recognize that separating spouses, both the legally married and common-law, need suitable mortgage options to help them deal with the division of property in divorce.
Meet The CMHC Spousal Buyout Mortgage 95
The Government of Canada through the Canada Mortgage and Housing Corporation (CMHC) has created a 95% CMHC spousal buyout mortgage for separating spouses.
Under the spousal buyout CMHC mortgage, the spouse staying in the matrimonial home can refinance a home mortgage up to 95% of appraised value to get tax free money needed to buy out the spouse leaving the home.
The spousal buyout CMHC is a unique refinance home mortgage solution. A clearer explanation is that it is also a home purchase loan, as you are buying out the home equity from your separating spouse. It is a CMHC insured, fully income qualified mortgage on approved credit and both spouses must be on title of the property - you must own the property jointly at the time of separation.
Qualify for mortgage process under the CMHC spousal buyout program is the same as other loans to buy a home. But in reality, you cash out your mutual tax free equity to pay out the spouse leaving the matrimonial home. You will need good credit and enough income to qualify for mortgage amount needed. Click the button below to submit your application and we will crunch the numbers.
How to deal with Division of Assets when you don't qualify for mortgage cMHC buyout
Each situation is unique and it is not always possible to qualify for a CMHC spousal buyout mortgage. There are many complications facing the separating spouses including not enough income to qualify for mortgage amount needed under the CMHC criteria, credit problems or if you need no proof of income loans and other mortgages when self employed.
This is when the alternative mortgage options help to solve the division of property in divorce problem involving your matrimonial home.
Alternative financing for home purchase to buy out the spouse leaving the matrimonial home is available up to 80% of home value. The home mortgage refinancing rates for the alternative spousal buyout are higher than the CMHC spousal buyout but here you get much more flexibility to solve a wider range of divorce assets division financing problems. Below are several financial tools that can be a fit depending on your situation:
- Bad credit score mortgage loans,
- Mortgages for business owners who can't prove income on their CRA tax returns,
- Private mortgage lenders short term solutions until your situation improves.
Each spousal separation mortgage resolves a unique problem
Each spousal separation application with divorce assets is unique and is assessed individually by the lenders, whether it is common-law or marriage separation. A variety of guidelines apply but the most important document you will need upfront is a Separation Agreement. This document outlines how division of property in divorce will be handled as agreed by both parties. It outlines how matrimonial division of assets, including the matrimonial home, any spousal or child support will be dealt with by the financial institutions under the Family Act.
I will leave you with the most important aspect of divorce and property division: You must have a Separation Agreement before banks, alternative mortgage lenders or private mortgage lenders with get involved in real estate financing for separating spouses. They are guided by the instructions in your separation agreement to qualify for mortgage under the Family Act.
Marie Copeland FSU, Hamilton mortgage brokers helping you with divorce assets, the real estate division of assets solutions.
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