Spousal Separation FAQ

In recent years there have been lots of changes to the rules which affect they types of mortgages of available.  One of the biggest changes is the reduction in the maximum loan to value allowed.  For a refinance the maximum loan to value is 80%.  So, if you have a $400,000 house the maximum you can borrow is $320,000.  This ultimately affects the ability to refinance in a situation where you are in a separation or divorce and the amount needed exceeds 80%, which unfortunately are so many these days.

Who is this product for?
This product was designed for people who are separating or divorcing from their spouse.  More specifically for people who are in need of financing in excess of 80% of the matrimonial homes value.  It has been my experience that most of these situations require financing for enough to take over the existing mortgage, buyout the ex-spouse and to possibly pay out debts.  This product will help to do all of these.

What is the product for?
 Basically, this product will allow one of the two ex-spouses to buy the house from the other.  Because we are arranging this new mortgage as a purchase, the lender is allowing us to go up to 95% of a property’s value.  For example, if a property has a value of $400,000 then you can get financing of up to $380,000, this is $60,000 more than previously allowed.  The money can then be used to pay off the existing mortgage and the penalty, also buyout the ex-spouse and pay off debts.

What are the Benefits?

• From 80% to 95% financing
• Allows one of the ex-spouses to keep the house
• Helps avoid the sale of the matrimonial home
• Helps both with the allocation of joint debts

Besides the arrangement of a new mortgage to release ones obligation I think this product addresses another really big problem which is commonly faced.  It allows one to be released from the obligation of a joint debt by rolling it in to the mortgage.  Even though it is often specified in a separation agreement that he or she is no longer responsible for a joint debt I would say it is rare that a lender will allow that person to come off of the debt.

What’s Next?
The first thing I will do is provide a free consultation.  In that consultation I will work with one or both to determine what options are available.  Also, I will pre-qualify one or both to make sure it is structured in a way that is most beneficial.  I know exactly how to structure one of these mortgages so I can help walk clients throughout the entire process.  Not only will I be able to help with the arrangement of the mortgage for the buyout of the ex-spouse but I will also be able to determine how to go about helping the other purchase a new house for them also.  The possibilities are endless…  I can think of so many ways to help a client with this.

Please don’t hesitate to contact me if you or somebody you know is in need of help with this type of mortgage.  If you are unsure it never hurts to contact me.

Shawn Mooney |Bayfield Mortgage Professionals Ltd.

Broker of Record

Your Mortgage Broker for Life

Bus. # 403-945-8769 | Mobile # 403-828-1838

Email: mortgages@shawnmooney.com

Website: www.shawnmooney.com