How to Buy Your Spouse Out of the Matrimonial Home

For many separating couples, their home is their most important asset.

That’s why seeking the advice of a divorce mortgage specialist can help set the stage for a successful separation – so the two of you can proceed financially independent of each other.

Spousal Buyout Program
Lance and Jenny have decided to separate. Lance wants to keep their family home, and Jenny wants to purchase a new property.

Their home value is $425,000 and their mortgage balance is $350,000. If they are splitting their existing equity, 50/50 (425,000 – 350,000 = $75,000/2), Lance must pay Jenny $37,500. They have a joint Credit Card with a $15,000 balance owing they would like to pay out if possible.

Under traditional re-finance guidelines, they are only allowed to refinance to 80% of their property value.

For example: Property value $425,000 x .8 = $340,000 Maximum Loan Amount. In this example, Lance will not be able to pay Jenny her portion of the home’s equity so that she will have a down payment for her home purchase. Using the Spousal Buyout Program, Lance is able to ‘purchase’ the home from Jenny and the maximum mortgage amount is 95% of the property value.

For example: $425,000 x .95 = $403,750 Maximum Loan Amount. In this example, Lance can pay Jenny her portion of the equity as part of their separation and she will now have the down payment for her new home purchase. Lance and Jenny may also be able to use any additional equity to pay out matrimonial debt as part of their settlement. $350,000 existing mortgage + 37,500 + 15,000 = $402,500 New Mortgage Amount

I have been in your shoes and endured my own divorce, so I understand your feelings as you work through this process. The need to create your own life while keeping the best interests of your kids in the forefront is paramount. There are many things to consider when dividing the matrimonial home and my sixteen years’ experience as a divorce mortgage specialist often helps couples work through difficult situations when creative thinking is required.

The key features to this program:

• Allows home owners access to 95% of the equity opposed to the traditional 80%

• Removes one spouse from title

• Inclusion of a lump sum payout and matrimonial debt

• Spousal, child support and Canada Child Benefit are used as income

• Best discounted interest rates

• No lender fees*

• Pre Qualify BEFORE your agreement is signed

I am a mortgage broker who lives in Spruce Grove, Alberta but serves all of Canada. I specialize in spousal buyout programs (divorce mortgages) and can make the process as efficient and stress free as possible. I look forward to chatting with you about your mortgage needs. I can help make mortgages simple.

Krista Lindstrom, AMP
Divorce Mortgage Specialist and Mortgage Broker
Axiom Mortgage Solutions