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How to Refinance Your Home Following Separation or Divorce

 

 

Divorce has the potential to destroy personal wealth

Understand that divorce is the biggest destroyer of wealth

Financial Post columnist Garry Marr calls divorce the number one destroyer of wealth and it is difficult to argue with him.  The financial ramifications are obvious.  It affects your retirement plans, your estate planning, and every one of your investments.    Your biggest investment is typically your home.  Making smart decisions about that asset in the wake of a separation and divorce could be what saves you financially.  Our team has helped many separating couples work through  the painful process of divorce.

Consider the four options for your home

There are four options for your home after divorce:

  1. Sell the house and split the profits
  2. Buy the house from your spouse and provide them with their equity share
  3. Sell the house to your spouse and retain your equity share
  4. Maintain joint ownership

Which of these options is right for you depends on a number of financial and emotional considerations.  It is not a decision you should make without careful consideration and advice from a number of experienced professionals.

Get professional advice

Your home is not just a financial investment.  There is an emotional attachment that is magnified when children are involved.  Making rational decisions is not easy.  That’s why it is crucial that you get unbiased, professional and accurate advice from the very beginning.   Getting good legal advice is obvious to most people but it is easy to overlook how a financial planner and a mortgage broker, for example, can help leverage a couple’s most valuable shared asset – their home.

Assess your financial situation

Before making a decision about what to do with your matrimonial home, it is important to evaluate exactly where each of you are financially.  There are a number of things to consider such as:

  • Can you afford to stay in your home? – You need to determine if you can afford the mortgage payments, taxes and maintenance on a single income without making other painful financial sacrifices.
  • Will you be getting spousal and child support? – These are income sources a lender will consider when qualifying you for a new mortgage
  • Your credit score – This is a major factor in determining your ability to finance your future home purchase. Improving and preserving your credit score during a divorce will affect your financial future

Work with a mortgage broker who understands the special needs of a couple facing separation

A mortgage broker should do much more than simply shop for the lowest rates.  For example, we offer separating couples a number of important services:

  1. A free financial consultation, financial plan design and budget analysis
  2. Individual credit checks and credit repair assistance if it’s needed.
  3. Arrangements for a professional appraisal
  4. Mortgage pre-positioning and pre-approvals from Canada’s leading major banks and lenders for any personal situation
  5. Guidance through the mortgage acquisition process from start to finish.

 

What a lot of people don’t realize is that the government has a unique program for separating spouses.  They can actually access 95% of the value in their home.  We guide clients through the process from start to finish.  Call us today with any questions.  We are here to help you reach your financial goals!

divorce-homePlease share your stories and advice about refinancing after divorce in the comment section below.

Ready to get started?

Tracy and her team are here to help. Apply online or contact us today and allow us to help you along your journey in life. We will always provide sound financial advice on the best options for your mortgage.