If you are considering separating from your spouse and you own a home, some considerations will need to be made about how to best move forward financially. When it comes to getting a mortgage, here are the top 4 considerations to factor in when separating from your partner.
- Can one spouse afford to pay out another?
In order to determine approximately how much mortgage you would qualify for, you would need to multiply your employment income by 4. This amount gives you the approximate amount allowable for a mortgage minus any debt or loans. Ensure you learn what applies to you for your credit and employment with the variety of lenders available. An independent mortgage professional will be able to protect your credit score by using one application to shop multiple lenders. There are lenders that will allow one spouse to refinance the other spouse out up to 95% of the properties value without a sale.
- Will there be spousal or child support?
This will impact both parties, the spouse who is paying now will have to include the amount being paid out which will decrease there amount for qualifications. The person receiving the support will be able to utilize a percentage of the money received in support to assist in getting a mortgage. Other factors would weigh into the mortgage amount allowable such as credit, the kids ages, and current employment. Its important to know that every lender has a different percentage that they will allow in child support to use as income.
- Your living arrangements during your separation journey can create different layers to navigate through when assessing your mortgage.
As an example, if both parties have moved out, this will change the occupancy and how the lender views the property, changing the property status from owner occupied to rental. I bring this up as with some divorce’s, a parent may step in as a co signer to help their child keep the home if they can qualify to do so. Unless its owner occupied, many lenders are not favorable to co signers on rental properties. There are different ways this can be navigated.
- Who can give me advice on what?
Divorce can be an emotional time. It is life changing and can be difficult to navigate. This is a time where you will need to rely on the expertise of your Mortgage Broker, Financial Advisor, Lawyer and Accountant. Each has their area of expertise so questions about your mortgage and how-to best position yourself and learn your qualifications should be brought to your Mortgage Broker. We will work together with all your advisors to help you through this difficult journey. A lawyer or an accountant will not understand what lenders are willing to do are not willing to do with a mortgage. Each expert will have to stay in their respective lanes while working together on this life transition, all with the view of doing what’s best for you. Every party can only advise based on the current snapshot of information within there related fields.
Angela Calla is a 15 year award-winning Mortgage Expert, Woman Of Influence & has been awarded Entrepreneur of the year 2019 by the Poco Best Biz Awards. Alongside her team, she passionately assists mortgage holders get the best mortgage, and educating them on “The Mortgage Show” on CKNW for over a decade. She is an international best selling author on Amazon with her book, The Mortgage Code. Proceeds from her book sales are donated to Access Youth Outreach services, a local charity in our community supporting our youth. She is magazine contributor, a speaker and recently collaborated with a group of women on her second book called Dynamic Women ® Success Secrets. For Media interviews, speaking inquiries or personal mortgage assistance, please contact Angela at acalla@dominionlending.ca
