Start Anew with a Divorce Mortgage
Divorce, Separation Mortgage
Divorce, Separation Mortgage
Going through a divorce or separation is stressful. With hope for what the future holds, a divorce mortgage will help you step into your new phase of life. Money is the number one reason couples argue and managing financing during a separation or divorce is just as hard. The pandemic is also driving up divorce rates by as much as 30%* making divorce and separation mortgages an important financial tool. We work closely with you to ensure you have all the support you need to get through this tough time.
Square Capital works to offer innovative mortgage solutions working with prime and private lenders to provide borrowers with fast 24-hour mortgage funding options (subject to terms and conditions).
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Once couples agree that separation or divorce is the right option, splitting up assets are next up for discussion. The matrimonial home is usually one of the largest assets’ families share. Divorce and separation also affect common-law couples. The Canadian Government* has provided guidance to couples going through separation and divorce. There are different ways to approach selling or keeping your home.
*FCAC
Options for Divorce and Separation Mortgages
- Sell the house – When both parties are in agreement to sell the house, the proceeds of the sale can be used to pay off any existing mortgage balances, plus housing-related costs such as legal and real estate fees. Paying off the existing mortgage early may result in additional fees and penalties. The money made from the sale of the property, after paying for associated costs, can be used as a down payment towards a new home.
- Spousal buyout – If the couple agrees that one party will keep the house, then they have to pay the agreed amount to the other spouse. Essentially one spouse is buying the house from the other.
- Spousal buyout + Refinance – The spouse that is retaining the mortgage and who may require access to additional funds, can consider a divorce mortgage including a refinance portion. Since separation and divorce may result in unexpected costs, the homeowner can include those costs with the divorce mortgage.
- Spouse keeps the home and mortgage – Once both parties agree that one person will keep the house and the existing mortgage, an assumption will need to be processed. This means the person keeping the house and mortgage will assume these in their name only, removing the other spouse of any ownership or accountability.
Divorce and Separation can affect your credit score – The process of separating and divorce can also affect your credit score, sometimes negatively. Since couples are moving from shared resourcing to individual, there may be unexpected pressure on finances. Square Capital offers divorce mortgage with refinancing options for bad credit situations.
Questions about Divorce Mortgages
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We know it’s complicated proving income earned and work with lenders who understand this.
Life doesn’t always go as planned. We help get your finances in order while boosting your credit score.
For different life situations, private lenders help with access to short-term, interest only mortgage loans.
Leverage your home’s equity and have access to immediate tax-free cash flow, with no regular payments.
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Other Mortgage Options
Other mortgage options
Homeowners have choices and can consider options to leverage their home equity. Depending on the product, these options may have slightly higher interest rates.
Private Mortgage
When homeowners cannot qualify for a mortgage to refinance through a bank mortgage debt consolidation or a home equity line of credit (HELOC), private mortgages may be an alternative. Since private mortgage lenders will secure a mortgage debt consolidation against a home, the interest is usually lower than high-interest debts like credit cards.
Private lenders usually charge a higher interest rate and fees than a bank, given the higher level of risk, however, this option still reduces interest costs over time. This is because these lenders understand that situations exist such as quick turnaround for financing, bad credit, stated income, and non-conventional properties.
Typically, private mortgages are shorter-term products and only require the interest portion to be repaid. Private lenders evaluate risk differently than traditional lenders and will consider the borrower’s ability to repay which is beneficial to self-employed and people with bad credit. Private lenders can also provide debt consolidation options through second mortgages.
Reverse Mortgage
An option available to homeowners 55 and older is reverse mortgages that provide access to the home’s equity without having to sell. Reverse mortgages allow homeowners to borrow up to 55% of the value of the home. The concept of this mortgage is essentially a reverse loan that means there are no payments required. Payments will be made either in monthly payments or in a lump sum payment to homeowners. Homeowners will pay the reverse mortgage loan when they move, sell or the last borrower dies. Typically, the interest rate is higher, and there are fees additional associated with reverse mortgages.
Debt Consolidation Mortgage
To understand if a debt consolidation mortgage or a HELOC could be suitable options to consolidate debts, and help get your life back on track, contact Square Capital Mortgage Brokerage. We understand each case is unique and there are many factors to consider including homeowners with bad credit or low income. Unlike traditional lenders like banks and financial institutions, with very strict lending terms, Square Capital works with over 50 lenders, including private lenders, to find the right solution for our clients. Our expert mortgage brokers and agents will help to find solutions to lower your monthly payment and reduce or stop the interest on your debt. Lower monthly payments every month reduces the chances of financial default while improving your credit and managing your money wisely.
Learn more about leveraging home equity for products such as mortgage refinance, home equity lines of credit (HELOC), and second mortgages.
Budget Planning and Expense Tracking
While products like debt consolidation mortgages, HELOCs, and private mortgages are tools to financial freedom, managing debt is the key to success. Practicing better money management in daily life like budgeting, monitoring spending, and saving. There are many free online apps that can support homeowners to achieve financial freedom and get better at managing money.
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Getting a mortgage after a divorce or separation can be challenging and overwhelming at times. Square Capital can help you get a mortgage for you regardless of your situation and need. We can help you determine exactly how much you can afford. Start your mortgage online.
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Contact us today to get a free quote. We will help you understand the current market conditions affecting the mortgage market! Prequalify without affecting your credit!
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