When it comes to divorce or separation, some individuals will want to stay in their homes. Backed by CMHC, Sagen and Canada Guaranty, the Spousal Buy-Out Program allows one party to refinance the shared home up to 95% of its appraised value.
To qualify, both you and your ex-partner must currently be on the deed to the property. As a one-time opportunity, this program can be used to pay off other debts outside of the separation agreement.
The Spousal Buy-Out Program was designed to help you and works to mitigate these costs by allowing a co-signer (i.e.: an existing family member or new partner) to assist.
Here are a few things you will need to complete a spousal buyout:
- Appraisal Report: this will likely already have been obtained to determine Equalization of Assets.
- A signed Separation Agreement: the lender must be provided a signed copy of the separation agreement. The details of asset allocation must be clearly outlined.
- Agreement of Purchase and Sale: a standard agreement stating new ownership.
- An Employment Letter or recent Pay Stub: this is required so the lender can verify your ability to manage your mortgage payments.
- (Optional) Debt Payout List: if you opt for this option, the Spousal Buy-Out can be used to pay off additional debts outside of the separation agreement. The proceeds can only be used to buy out the other owner’s share of equity and/or to pay off joint debt as explicitly noted in the signed separation agreement.
If you are currently going through a divorce and are hoping to remain in your family home, or want to discuss how this impacts your mortgage, please don’t hesitate to reach out.
