The only thing constant is change
Is your relationship heading down another path? A spousal buyout mortgage may be the tool to provide some financial freedom. If you find yourself looking to make personal and financial decisions, let us offer some direction to make this adventure a little less stressful. We are happy to meet with all parties together or individually, do some brainstorming and come up with some agreeable solutions. Keep in mind every financial situation is different and having the ability to look from the outside in may be just the direction you need.
Details of the spousal buyout
The spousal buyout mortgage is a great option for one person to stay in the home and use the existing equity to buyout the other. This program is not only available to married folks, but those in common-law relationships, friends, or family members.
The program allows financing up to 95% of the appraised value of the property. The party looking to remain in the home would have to qualify under the current borrowing guidelines including good credit and being within the lending ratio guidelines. The equity in the property can be used to buyout the departing party.
An example might look like:
Current property appraised value $400,000
95% of appraised value $380,000 (new mortgage)
Existing mortgage amount $360,000
Equity $20,000
Spousal buyout costs to consider
There are several costs that you will likely incur when obtaining a spousal mortgage. Here’s a list to give you an idea:
- Penalty to payout existing mortgage
- Legal fees for new mortgage
- Appraisal to determine property value
- Separation agreement
Take the step
Any way you decide to go this will be challenging. Reach out to us as early as possible to discuss your options and determine the best step forward.
