Happily Ever After Does Not Always Happen....

Splitting up, Separating and Divorce ..... now what happens? This can be a hard, confusing and emotional time for most people. Questions in your head spinning outta control, with the "what if's" piling up and weighing you down..... How does one partner keep the home? Can you keep it? How does one partner get paid out from the home? What can we do with all this joint debt? Can we pay out debt? If I am getting alimony can I use that as income? Does child support count? What if I do not have a job?  What if I am paying alimony and or child support, how does that affect how I can get a home? .... the questions can just keep on spinning and piling up!

Now more than ever you need some experts in your corner and a licensed mortgage broker would be the best solution for your mortgage questions. And breath easy there are solutions, but we need to make sure all the right things are in place first. When I am talking to one or both of the parties involved in a divorce or separation the first question I tend to get asked is, "How do I keep the house?" and then followed by,  "How do I then get my own house?" ... so lets start there.

Good News! Genworth & CMHC do have "Spousal Buyout Programs", however really they are treated as an extended purchase mortgages; so a few things have to be in place. We can go back up to 95% loan to value of the appraised home amount, so that could potentially allow for a few things to happen. (1) Debt to be paid out (2) money to be given to the one not keeping the home (3) the one party actually keeping the home. To do this, yes the one keeping the property does have to qualify on their own to carry the new mortgage (regular insurer guidelines for income to debt ratios) and what will also be requires is a separation agreement, appraisal and a purchase contract to be able to complete.

But lots of things can come into play especially with a separation and or divorce for that mortgage application (whether you are the one wanting to keep the house or get your own). Like joint debts, child support and or alimony, job status etc etc.....

Does alimony and or child support count as income? Yes, however it needs to be listed in the Separation Agreement and we usually need to see a 3 month of it being received into your bank account. I have had some woman that were the homemakers so they are going into the divorce with no income except the alimony their ex spouse is paying. These are harder situations to work with but not impossible. For these a strong cosigner is required especially if there is no job coming in the near future.

How does it affect my home purchase if I am the one paying alimony and or child support? You would have to qualify for your new purchase, whether that is using the insured or conventional guidelines. In the application, child support is added as a debt being paid, where as alimony can be either added as a debt or just deducted from current income. Usually the later is the best way to do the application for qualification purposes.

Can we pay out some joint debt with this Spousal Buy Out? Yes, if it is listed in the Separation Agreement. However the insurer can still decline some of these pay outs on a case by case basis - that being said, most listed in the separation agreement are indeed paid out if there is money to do so.

Do I have to have a Separation or Divorce document? Yes, and it has to be completed via a lawyer or a notary. Most times I am doing these types of transactions with the Separation Agreement as actual Divorce documents take more time to complete.

With Stats Canada telling us that from 2001-2005 the Canadian numbers are 70,601 for divorce this is something that everyone should know about for available options when in this situation. Most people know to speak to a lawyer about these matters but most do not know to speak to a licensed mortgage professional, so that you can have your housing options figured out as well. Which is a big deal! Where you will live, or continue to live, kids etc etc... if you are going through this right now I can help you solve your mortgage questions and issues. That way you can take some of the questions out of the process and you can sleep better at night.

Call or email me today, and lets get your options on the table!