Divorce and Mortgage: How to Keep the Property When Going Through a Separation
February 9, 2025 | Posted by: Alex Vinarski
Divorce and Mortgage: How to Keep the Property When Going Through a Separation
Divorce is a challenging time, and figuring out what to do with shared assets, like your home, can add to the stress. If you’re going through a separation and one party wants to keep the property, refinancing the mortgage to buy out the other party’s share is a common solution. Banks will treat new mortgage as a purchase. However, if your income isn’t high enough to qualify for traditional refinancing, private lenders can help. Here’s how it works:
1. Refinancing to Buy Out Your Ex-Spouse
When one party wants to keep the home after a divorce, refinancing the mortgage is often the best option. This involves:
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Paying Off the Existing Mortgage: The new mortgage will cover the remaining balance on the current loan.
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Buying Out the Other Party’s Share: The refinanced amount will also include funds to pay your ex-spouse their share of the home’s equity.
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Taking Sole Ownership: Once the refinance is complete, the property will be in your name alone.
2. What If Your Income Isn’t Enough to Qualify?
If your income doesn’t meet the requirements for traditional refinancing with a bank, don’t worry—private lenders can step in. Private mortgages are a flexible alternative for borrowers who:
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Have lower income or irregular earnings (e.g., self-employed individuals).
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Need a short-term solution while they improve their financial situation.
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Want to keep their home without selling it during a divorce.
Private lenders focus more on the equity in your home than your income, making it easier to qualify. While interest rates may be higher than traditional mortgages, this option allows you to keep your property and move forward with your life.
3. Steps to Refinance with a Private Lender
Here’s how the process typically works:
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Determine the Home’s Value:
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Calculate the Buyout Amount: Work with your ex-spouse and a legal professional to determine their share of the equity.
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Apply for a Private Mortgage: A mortgage broker (like me!) can help you find a private lender that fits your needs.
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Close the Refinance: Once approved, the funds will be used to pay off the existing mortgage and buy out your ex-spouse’s share.
4. Why Work with a Mortgage Broker?
Navigating divorce and mortgage refinancing can be complicated, especially when private lenders are involved. As a mortgage broker with over 17 years of experience in Vancouver, I specialize in helping clients:
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Explore all their options, including private mortgages.
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Find lenders who understand unique financial situations.
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Simplify the process during a difficult time.
5. Final Thoughts
Divorce doesn’t have to mean losing your home. With the right strategy—whether through traditional refinancing or private lenders—you can keep your property and start the next chapter of your life. If you’re going through a separation and need help with your mortgage, reach out to me today. Let’s work together to find a solution that works for you.
Call to Action:
Are you going through a divorce and want to keep your home? Contact me at 604-722-0203 to explore your refinancing options. Let’s make this transition as smooth as possible.
