A separation is rarely simple. When a mortgage is added to the equation, decisions can quickly carry significant consequences, both financially and emotionally. In a segment on Radio 104.7 Outaouais, Patrick Dumond, a mortgage broker with Multi-Prêts, emphasized an essential point: even in the midst of strong emotions, it is possible to find a win-win solution.
Separation: How Does It Affect Your Mortgage?
When a couple separates, many questions arise: Should the property be sold? Can one partner buy out the other’s share? What happens to the existing mortgage?
The answers depend on several factors, such as marital status, whose name appears on the deed, and long-term financial capacity. Clarifying these elements from the outset helps structure the decision-making process and avoid choices driven solely by emotion.
Selling or Keeping the Home: A Strategic Decision
For some, selling the property is a way to close a chapter. For others, keeping it is a priority, particularly to maintain stability for the children. Before deciding, it is wise to assess the current market value of the property, ideally with the help of a certified appraiser. This analysis opens the door to various options, including a buyout.
Buying Out a Share: Are You Eligible?
Buying out an ex-partner’s share means becoming solely responsible for the mortgage. Mortgage prequalification helps confirm borrowing capacity, anticipate future payments, and clearly understand the impact of the new financial reality, making it easier to move forward with confidence.
Refinancing to Start Fresh
A lesser-known option is refinancing the property, in some cases up to 95% of its value. This strategy can make it possible to use accumulated equity to reorganize finances after a separation and reduce financial pressure, while still retaining a significant asset.
Navigating Separation Without Compromising Your Financial Future
As delicate as it may be, separation is part of life. Consulting a mortgage broker, in collaboration with a notary when needed, can help turn this period into a structured, thoughtful process focused on the future.