Spousal Buyouts By Mortgages By Erin

Growing up, most people dream about living a fairytale with a wonderful partner and a life of bliss. Unfortunately, real life is not always a fairytale, and not every relationship lasts forever. In fact, the latest statistics show that thirty-eight percent of all marriages in Canada end in divorce.

Separating, whether through a divorce or ending a common-law relationship, is never an easy step. Losing someone close to you (whether for the better or not) is hard, but it doesn’t have to mean losing your home too. Most individuals going through a separation feel as though they are forced to sell their home and split the equity depending on their agreement, but there is another way.

To offer more insights about spousal buyouts, Mortgages By Erin has covered a few details about it in this blog.

Spousal buyouts are one of the mortgage industry’s best-kept secrets, and I want to blow the lid on this great alternative! While not everyone will want to remain in their home, many individuals may opt to remain rooted, especially for those with children who are already enrolled in school and happy in their neighborhood. This is where the Spousal Buy-Out Program comes in.

Backed by all three of Canada’s mortgage insurance providers (Canada Mortgage and Housing Corporation, Sagen™, and Canada Guaranty), this program is designed to allow one party to refinance the shared home up to ninety-five percent of its appraised value. In order to qualify, both you and your ex-partner must currently be on the deed to the property. As a one-time opportunity, the Spousal Buy-Out Program can also be used to pay off other debts outside the separation agreement, further assisting with the transition.

If you’re separating from your spouse or partner and would really like to hold onto your shared home, this program is for you. It may allow you to remain in your home after the separation.

So, if that’s your goal, there are a few things you will need, including:

1. An appraisal
An appraisal report will likely have been obtained to determine the Equalization of Assets. However, in some cases, the appraisal may not be acceptable to a lender unless a third party originally ordered it. To ensure accuracy, the appraisal must also have been produced within ninety days (less with some lenders). If the original report was previous to ninety days, a new one must be obtained.

2. A signed separation agreement
To qualify, the lender must be provided a signed copy of the separation agreement. The details of asset allocation must be clearly outlined.

3. An agreement of purchase and sale
A standard agreement of sale indicating the new ownership.

4. An employment letter or recent pay stub
This is required so the lender can verify your ability to manage your mortgage payments.

5. Debt payout list
This is an optional one-time option for paying off additional debts outside of the separation agreement. The proceeds can only be used to buy out the other owner’s share of equity and to pay off joint debt, as explicitly noted in the signed separation agreement.

All things considered, this program is built to ensure that separating partners never feel as if they have to lose their home or feel trapped within it.

If you are curious about how the spousal buyout program can benefit you, contact a licensed mortgage professional or reach out to me at Mortgages By Erin. Based on your situation and requirement, I will take you through the entire process, from consultation to mortgage approval and receipt. If you qualify, you can simply look into refinancing your home to remove your spouse or partner and access the equity required to buy out their interest in the property.

To learn more about spousal buyouts, give me a call at (647) 885-6940 or email me at erin@mortgagesbyerin.ca. As a leading mortgage broker in Toronto, ON, I have over ten years of experience helping clients realize their dream of homeownership. Along with my team, we pride ourselves in creating long-lasting relationships, as our reputation is built on perseverance and fast, friendly service.

For more details about my services, please click here or get in touch with me by clicking here.