• Mortgages When My Relationship Ends (2022)

    May 22, 2020
  • Mortgages When My Relationship Ends

    By: Robert Floris

    Lead Mortgage Broker with over 30 years of mortgage expertise, currently at Mortgage Architects.


    I thought my marriage would last.

    Financially and emotionally I am a wreck.

    Where should I start?


    Let’s talk about what happens and where to begin. Let’s not kid ourselves, it said that 50% of marriages end in divorce. It is not easy for anyone. It’s important to gather knowledge, especially if kids and home is involved. We thought we would focus only on married couples and not common-law relationships. The most important thing to help yourself is to visit a family lawyer to educate yourself on your rights and a plan to ensure a smoother ending. The lawyer, I suspect will review a separation agreement.


    What is a separation agreement? A separation agreement is a contract between the two spouses, which is legally binding.


    What Does a Separation Agreement Cover? It cover’s each spouse’s rights in terms of:


    • Child custody
    • Child support
    • Child access
    • The division of the home and the assets
    • The division of debts


    Based on the principal residence portion of the separation agreement, we will discuss how the home will be treated. Under the Family Law Act in Ontario, each spouse is entitled to 50% of the equity. The system is very fair for the matrimonial home, even if only one spouse is on title. In fact, both spouses can actually live in the family home unless a judge gives reason to leave for security reasons.


    So now the separation agreement is complete and you are ready to start your next phase of your life. What options are available with the home?


    1. Sell the home and rent or purchase another home
    2. Buy out their spouse who will give up their 50% ownership
    3. If there is no equity in the home, both spouses agree to rent or sell property at a loss


    We will concentrate on the second option. At Robert Floris’ Mortgage Architects office, it is considered the most popular option. One spouse generally buys the other spouse out. In Canada, we can buy out the ex and get a mortgage of up to 95% of the value. Remember only if you have a legally signed agreement, if your income qualifies and if you have good credit. In essence, you buy out the spouse by refinancing and paying them out and you then become the sole owner. For better or worse, your old life ends and your new destination begins.


    So, what is the conclusion? To prevent financial and emotional stress, do the following:


    1. Get legal and financial help – Put everything on paper and have a plan
    2. Finish your separation agreement
    3. Get your affairs in order
    4. Communicate with all parties, including your ex to ensure a smoother process


    Robert Floris has been in the mortgage industry for 30 years, including working as a Sales Manager for a major chartered bank. Over his career, he has personally lent over 1 billion dollars and proudly continues to advise and tutor his valuable clients.




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