One of the biggest ways divorce can have an impact on your life is in regards to finances. Splitting up your assets can be both emotionally and practically difficult. Your home is most likely the biggest purchase you made with your former spouse, and it’s not necessarily easy to sort out its mortgage post-divorce. You do have a few options though, which I will help explain.
Selling the home
Often it seem easiest to sell anything big that you own and split up costs that way, in order to divide your assets. This is a viable option, but selling your home may not be easy if one of you is set to remain living there or if it’s just not a good time for dealing with the process. You may find yourself having to sell in a buyer’s market, for one. You’ll also have to agree with your former spouse on how much you will accept for the house, and you could have to pay a penalty for breaking your mortgage early.
Getting your or your former spouse’s name off the mortgage
There are a few ways to go about changing the mortgage to have only one of your names on it. However you go about it, you will have to pay the equity for your former spouse.
In some cases, it can be as easy as asking your bank to remove your name–this won’t always work, but do look into it. Another option is to assume the mortgage, which means that whoever remains on the mortgage will continue with the original terms of the agreement. One of you will be signed off from having any liability on the property in the future. If you’re the one that will keep the house, you’ll also have to prove that you will be able to continue paying the mortgage. Keep in mind that not all mortgages can be assumed.
If sticking to the original agreement terms is not ideal for you, you may be able to refinance your mortgage. This could allow you to get a new mortgage rate that will work better.
Securing a new mortgage on your own
If you’ve decided to either sell your home or let your spouse keep it, purchasing a new home is an option. Don’t worry about whether divorce and a broken mortgage will hinder you. Work on getting your credit score up to the high six-hundreds, save up for a down payment beyond the minimum ten percent, be able to show that you have a solid income, and get a great Brampton mortgage broker on your case.
Divorce is unpleasant, but you can move forward from it. Contact me if you are going through or have recently divorced to find out how I can help.
