In a Separation, what happens to the home? mortgage?
Of course if both wish to sell the property, the division is normally simple. But what if one party wants to keep the home...but doesn't have cash to buy out the other? There is a potential solution under a program in Canada as long as both parties are on title. This program allows you to draw up to 95% of the equity from the property (essentially recreating a 5% down purchase), normally enabling a payout to the party being bought out. Typically with a home you already own, you would only be able to draw up to 80% of the equity so this program allowing up to 95% is a huge benefit.
The rules in this program are extremely specific, and not at all flexible. If this is something you may be considering, do not change title on the home first and foremost. We see people jump to do this but it will eliminate you from the program.
What do I do first? The party who wants to keep the home needs to get pre-qualified before paying for it to be part of the separation agreement.
Questions? I would be happy to help. Please see the links below for more information on this program as well as my direct contact info. Thanks for reading!
Edmonton Mortgage Broker Nikole Krupka