What are your Mortgage Options when Going Through a Divorce?
Going through a divorce can be an extremely painful and difficult thing for everybody involved. But add to that the fact that you have a Toronto mortgage and things can really get complicated. So what are you supposed to do with your mortgage once you start going through a divorce? Luckily, unlike anything else that you’ll likely face during the divorce proceedings, this is an area where you have options.
Option #1: Sell the home and divvy up the goods.
Some couples are so undecided on who gets to keep the home; or they know that neither of them can afford it on their own. When this happens, selling might be the only option. The sale would take place just as it would if you were still married. Except this time, half of the proceeds will go to you, and the other half to you ex-spouse.
Option #2: Someone can buy someone else out.
Sometimes a home just can’t be let go of. Memories are there and during a divorce, those are sometimes the only things we feel we have left. Plus, the home may be in the ideal location for the kids to go to school, for either of the parents to continue working, or it may be located near an ailing relative. There are lots of reasons to buy the house from another spouse in cases of divorce, and it can be a good avenue to choose. If you want to buy the house from your spouse, you need to know how much of the home they currently own. This can usually be done very simply by determining the amount of home equity that’s been built up over time, dividing it in half, and then paying the other spouse that amount for half of their equity. Lawyers, mortgage brokers, and lenders will still need to get involved to get the ex-spouse’s name off the deed, but this can be a good option.
Option #3: Own the house jointly for a temporary period.
If you and your ex-spouse are going through an amiable divorce, sometimes it’s possible to co-own the home together, but with one person no longer living there. It’s beneficial to the person staying in the home because they won’t be entirely uprooted; and it’s beneficial to the spouse who doesn’t live there because they can still collect on the proceedings when the home does sell.
Going through a divorce is never easy. And when you throw mortgage payments and home equity into the mix, it can become even more confusing. Knowing what your options are though, can certainly help you see that you do have some, and that not everything is as final as it seems.