Spousal Buyout Mortgage in Victoria BC
Spousal Buyout Mortgage
Going through a divorce is never going to be easy, but there are a few steps that you can take to protect your home and finances during a separation. A spousal buyout mortgage in Victoria BC will allow you to become the sole owner of your home or receive an equity settlement so that your ex-partner can remain there.
The Basics of a Spousal Buyout Mortgage
Nearly 50 percent of marriages now end in divorce, and those separations can result in some complicated financial issues. If you and your partner are separating and you currently own a home together, then you might want to consider a spousal buyout mortgage. With that type of mortgage product, one of you will become the sole owner of the home while the other is going to receive their share of the equity.
Benefits of a Spousal Buyout Mortgage
Remain a Homeowner: Divorces are never going to be completely stress-free, and you want to be sure that you do everything in your power to make your life as easy as possible during the separation. With a spousal buyout mortgage, you or your ex-partner can avoid the complicated process of selling your home and splitting the profits.
- Receive Equity Immediately: After paying on your home loan for years, you have most likely built up quite a bit of equity. This type of mortgage product will allow you or your ex-partner to receive some of the existing equity.
- Simplify the Separation Process: It is an unfortunate fact that many separations are very complicated, and selling your family’s home is only going to make that transition more difficult. A spousal buyout mortgage will remove one potential roadblock from your life so that you can continue to focus on moving forward.
A spousal buyout mortgage is very similar to a traditional mortgage, but only a single individual’s information is going to be used. If you are going to be the one who maintains ownership of the home, then you will need to submit your proof of income, employment history, and credit history. Just as with a traditional home loan, you must meet the lender’s requirements in order to be approved. Additionally, both of the parties must have their names on the deed for a spousal buyout mortgage.
What to Expect
The steps that need be taken for a buyout mortgage are slightly different in every situation. If you and your ex-partner are splitting amicably and can agree on the value of the home and the equity in the home, then you can simply apply for a new mortgage for the total amount that is still owed on the loan. For complicated separations, a real estate assessor will most likely need to be hired to determine the value of the home and how much equity has been built up. Once the final paperwork has been approved, the deed can be changed almost immediately.
Next Steps to Take
I understand that these types of situations can become quite complicated, and I would love to help you make this process a little bit easier. During your initial consultation, we can explore all of your options to see if a spousal buyout mortgage is right for you. I invite you to contact me today to schedule a no-obligation appointment to learn more about this mortgage product.
Frequently Asked Questions
What if I am not the primary income earner? Unfortunately, you might not be approved if you don’t have adequate income or your credit history is poor. In those scenarios, it is often easier to sell the home.
Do we need to be officially separated for this type of loan? Most lenders will require a signed separation agreement or proof of a divorce before they consider approving a spousal buyout mortgage.
Can the equity be used for other purposes? As a general rule, the equity will first be used to pay off existing debts. If there is any equity remaining, then it will be transferred to the party who is no longer on the deed.
Do both parties have to be on the title of the home? Yes. In order to apply for a spousal buyout mortgage, the parties have to legally be co-owners of the home.