Divorce is a painful reality for many couples. It comes with a lot of emotional, economic, financial, and debt baggage. Many people opt to buyback of their shares due to a divorce proceeding.

Good financial management is essential for both parties post-separation. It involves settling the mortgage and joint debt issues. They have to be settled amicably to minimize financial damage to both individuals.

Canadian firms like Prêt hypothécaire Nord Est offer financial advice in divorce mortgage and spousal buyout cases.

This article takes you through the issues around debt mortgage and how to deal with them.

Let us begin!

Understanding spousal buyout mortgage due to divorce

If an individual decides to remove a spouse from the title of the property after separation, he/she has to refinance the property and pay off the mutual debts.

The remaining equity is split 50%-50% or as agreed by the parties. This is called a spousal buyout due to divorce.

Issues around the spousal buyout

Spousal buyouts are not an easy affair if the individual has issues with financial management.

The following issues need to be considered for estimating the ability to get a divorce mortgage for a spousal buyout.

  1. Income: The individual should have a good income to fund the mortgage by themselves. Sometimes, he/she must be ready to refinance a higher loan amount after separation. Usually, the initial purchase is made based on the incomes of both partners. So, it becomes challenging to bear it for an ex-spouse after divorce. Hence, some people opt for property sales or downsizing.
  2. Credit score: A good credit score means that you will be able to refinance up to 95% of the value of your property.  However, if the credit rating is very poor, it becomes difficult to get a standard divorce mortgage for a spousal buyout. You will need an alternative financing solution.
  3. Equity of the property: If the difference between your equity in the property and the current amount of mortgage is very low, you may need an alternative to the traditional financing option and speak to a mortgage advisor about a buy to let mortgages deal London.

How can a professional agency help you?

There are mortgage broking firms that help you deal with the issues that may crop up due to spousal buyout in a divorce.

  • They give sound financial advice about property valuation. It helps you evaluate your income and mortgage burden after divorce.
  • They help you secure loans from private lenders as an alternative financial solution due to bad credit scores.

Concluding thoughts

Seek the services of an experienced mortgage broking firm to ensure a hassle-free spousal buyout due to a divorce.