Wednesday, November 14, 2012

Divorce and Mortgages

The purpose of this post is to inform consumers that you can refinance up to 95% in a divorce situation if one spouse wishes to buy out the other from the matrimonial home.  The relationship could also be common law, you do not have to be legally married. 

It is a process that not many lenders are willing to do with the new mortgage rules maxing refi's at 80%.  In fact most people in the industry do not even know it can be done.  There has been a provision put in place by the family law act allowing one spouse to take over the home from the other.  Because of the 80% refinance rule families were forced to sell their home in order to split up the equity, which is really unfair especially if children were involved.  With this new rule it can make the transition for children much easier.

There must be a legal separation agreement in place in order to do this.

Any equity that is left over can be used to pay off the other spouse if that is in the agreement. 

Of course you have to fully qualify on your own with acceptable credit and income.  Alimony and child support do qualify as acceptable income.

The existing equity is used as the down payment and closing costs.

It is expensive enough getting seperated or divorced especially if you have to pay huge real estate fees.  Average commission in selling a home is 5% + HST, it is much cheaper if one of you can keep the home.

If you are in this situation and would like to know more feel free to contact me which ever way works best for you.  You can also fill out the mortgage application if you wish to get started right away, I will contact you immediately, provided I am not golfing.  If you prefer doing things in person I have an office in Mississauga as well as Hamilton or I can meet you at your home.

There is no charge from me on this type of mortgage provided we can use an "A" lender and a minimum 5 year term is used.  There may be an appraisal required, not always.  Also a lawyer must handle the transaction.  We walk you through the whole process, it is actually quite simple. 

I can only service clients in Ontario Canada.  If you are in another province feel free to ask for a mortgage agent in your area and I will do my best to find one.

Till next time, have a great day. 

Ron Miller

YouTube Hamilton Broker

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