Spousal Buyout Mortgage Edmonton-Divorce and breakup mortgages

What is a spousal buyout?

A spousal buyout is a mortgage term referring to when a certain amount of money is required to pay out a spouse after a breakup or divorce. In most instances the majority of the of the money accumulated during a relationship may be tied up in a residential property and one of the people in the relationship may want to retain the property. In other words if a husband and wife or girlfriend and boyfriend buy a house together, one person will continue to live in the property and the other will be paid out and have their name removed from a property, allowing them to purchase their own property.

Many people do not know what a spousal buyout is and without knowing your options can be costly. For example a person that does not know what a spousal buyout is, might choose to sell the property. By doing this, you would incur large expenses such as legal fees and real estate fees in regards to the sale. In most instances, this would be the most expensive way to pay out your ex.

5 Things you need to know about doing a spousal buyout

1. The banks will allow you to refinance the property up to 95% of the value
2. You may incur penalties for doing a spousal buyout
3. You will want to have a separation agreement in place
4. The lender can pay you ex’s lawyer directly
5. You will need a real estate lawyer for this
6. Get a mortgage broker (us!)
7. You will need to be able to qualify on your own for the mortgage
8. If your mortgage is up for renewal there is no penalty to to a spousal buyout.

What are the steps for doing a spousal buyout mortgage in Edmonton?

1. Reach an agreement with your spouse or ex on an amount
2. Obtain a separation agreement or legal document stating that this is the agreed on amount. Make sure it states that after the payout, you are not liable to payout anything additional.
3. Call a mortgage broker 780-278-4847 (Us!)
4. Hand in all required supporting documentation for qualification
5. The mortgage broker will obtain the approval for the spousal buyout
6. Mortgage broker will order an appraisal (at your expense)
7. The mortgage broker will instruct your lawyer
8. Sign documents at the lawyer
9. Lawyer will pay out your ex and register you on title as the sole owner of the property.

Can I have someone else on the mortgage with me if I do not qualify on my own?

Yes you can have a family member come on the mortgage with you if you do not qualify on your own. The lender will require evidence of the separation agreement to prove that this is for a spousal buyout.

What documents will I need to provide for a spousal buyout

1. Offer to purchase (we can help you fill this out)
2. Employment letter
3. recent pay stub
4. Void check
5. Separation agreement
6. Copy of your ID
7. Appraisal

Why do I need a separation agreement for a spousal buyout?

The separation agreement will clearly outline how much is owed to both parties. Normally once paid out, parties are no longer liable for a lump sum payment to the other. It protects you from the other person coming back to you for anything additional.

How does a spousal buyout work?

A spousal buyout will pay out you ex, you are essentially using the equity in your matrimonial home to pay the other person what they are owed after severing the relationship. The divorce lawyer/lawyer will outline exactly how much each party of a relationship will receive and the courts will make the final decision if you are unable to agree on a number. This allows both parties to fairly exit the relationship from a financial standpoint.

Who pays for the appraisal during a divorce or separation?

Normally the person keeping the house will pay for the appraisal. You could fight this if you want and have the lawyer split the cost of the appraisal, however you have bigger fish to fry and it may end up costing you both more in legal fees to negotiate this.

What is the cost of the appraisal in a separation/divorce?

An appraisal will cost around $250 in most municipalities in Alberta. It varies across the county. Please call us anytime to discuss this and we can get you an accurate figure.

Why should I do a spousal buyout?

Getting a spousal buyout and refinancing a mortgage into your name is one of the best things you can do when you break up. It allows both parties essentially to have a clean slate, and move on without interference from the other party. Wether you are going through divorce or just breaking up, both people will need money and credit freedom to be able to move on and purchase another property. Even if a breakup is cordial, you are still going to want to free yourself of the burden of the debt on the home. I have seen people argue so much during a divorce that they would not agree on a spousal buyout amount and it resulted in the foreclosure of the property. Both applicants credit was ruined and they lost the home to the bank.

What can happen if I do not do a spousal buyout?

1. You may be owed money your ex cannot afford to pay. This can drag on for years, and you might never get paid.
2. If you are continuing to live in the property, your spouse will be eligible for half the property. Even if you are making the payments.
3. Your ex could stop paying resulting in both parties credit being damaged. I have seen this many times, please avoid this
4. You will not be able to buy another home because you are fully liable to debt service the payment on the house.
5. You could get refused for other loans because you have this debt in your name.
6. A person could get stuck renting if you cannot debt service another home. Obviously owning is cheaper in Edmonton, so it would cost you more money.

How can you help me do a spousal buyout?

We are Edmonton based mortgage brokers servicing all areas of Canada. We can help you get you spousal buyout done anywhere in the country at the lowest rate possible. This will allow you to have the freedom from your ex you want and get you the lowest possible payments. Our team works with you to devise a mortgage plan that will suit your mortgage goals….not you ex’s.

Please call us anytime to discuss you spousal buyout in Canada.  We can help get you discounts on lawyers and appraisers so that you can put more money in your pocket.We want to help you and can walk you through the process step by step. I can be reached at 780-278-4847