Mortgages during Separation and Divorce

Your Home is Likely Your Largest Financial Asset, and getting a Mortgage when going through the Separation or Divorce process, should be handled by a mortgage professional who has the experience and knowledge to help you through this stressful time. If done correctly, getting mortgage transferred or getting a new mortgage under your name, after a divorce or separation, can be done easily. We deal with lenders/banks that understand the separation/divorce process. Items to consider when contemplating or going through separation/divorce;

1. Legal Considerations – Documentation and Name changes
2. Children – shared costs and custody
3. Alimony and Child Support
4. Joint bills and Credit
a. You will need to close or transfer any joint lines of credit, credit cards and shared loans.
b. If your ex will be taking over the joint line of credit or credit cars, you MUST ensure that your name is removed. Likewise, if you are taking over the shared credit instrument, you must ensure that you remove your ex from the line of credit or credit card.
c. If you do not have many individual lines of credit (ie all your credit lines were shared), you should take this time to develop your own credit history.
d. Check your credit report, and highlight everything that should be changed, so you can methodically go through and make these changes. You do not want to discover a shared credit line on your credit bureau after many years of being separated, especially if your ex was not the most responsible with their credit.
5. Division of common assets. Individual Assets like RRSPs, TFSA, and Estate Planning. Review all documentation and make notes.
6. Income Budget. You will want to do a budget of your current post divorce income situation, so you can ensure that you can meet your monthly bills and annual wealth goals. Alimony and child support should be factored in your budget analysis. We have budget planners that we can send you, to help with this analysis
7. Mortgage of Home Property:
a. You can sell the property and split the proceeds and pay off the old mortgage.
b. You can refinance your house to put the property under one name and pay out the other person their share of the house.
c. You can get a new mortgage and pay out the old mortgage.

When getting a new Mortgage, below are the items to get in order;
1. Check your credit score or we can check your score for you
2. Put together your income documents – Job letter, paystubs, NOA
3. Net worth statement to see what you have for your down payment on the existing house or a new one.