Going through a divorce is something that you don’t expect to deal with in life, it just happens. Not only are you dealing with emotional stress, but you have to add financial stress into the equation. Separating all your finances, assets, bills, and credit cards from one another can be a headache and a half. Luckily, a mortgage broker can help alleviate some of the stress when it comes to your mortgage while coaching you through the steps that you must take. An experienced mortgage broker and financial advisor will also be of benefit in terms of the advice they can give you through the overall process during a separation or while finalizing your divorce.
The first question: What you are going to do with the house?
Are you going to sell it? Is one person going to keep it? Will you have the financial stability to do this? If you purchased a home with your partner, you both have the equal right to decide what happens to the home going forward. Your divorce lawyer will help finalize the plan for your home’s future. It’s important to understand your options and to be rational with your decision so you choose what’s best for your lifestyle and long-term benefit instead of reacting negatively out of spite. Keeping the house just so that your ex can not is not a valid reason to support that decision.
Option 1: Selling the home and starting fresh
If you decide you are going to sell the home, normally the value is split 50/50. You will work with a real estate agent and put the house up for sale. In the meantime, you must find another place to live. Will you rent with someone? Will you buy your own house with the profit from the sale of your marital home? There are many options for you, but just remember that you won’t have your partner’s income to help pay your bills. You can work with a financial advisor, like myself, to go over your options, concerning loans, mortgage rates, and housing plans. You will also need to get pre-approved for a mortgage ahead of being able to buy a new home which includes proving to your lender that you are financially stable on your own and can pay your bills on time long-term.
Option 2: Buy out your partner’s portion and keep the home for yourself
If you decide that you want to stay in your home, then you must buy out your partner’s half. You will have to get the home appraised to see what the property is worth in today’s market and then pay out your partner’s portion. This is common if you have children and they have already adapted to their school, neighbourhood, and home. After all, they have already had a huge change in their daily routine with one of their parents being absent from their regular day-to-day activities. It also saves you from house hunting and starting all over. Plus your family has made some great memories in your home, and moving can be added stress.
Question 2: What do you need to do to secure your new mortgage?
Evaluate your new income
You will be on your own paying your bills without having a portion of your partner’s income supporting your monthly costs. It’s important to evaluate your income to see how much you are able to afford each month. This includes your housing costs, phone bills, grocery bill, utilities, leisure, automobile, and so on. Create a budget and stick to it. You will also need this information when applying for your mortgage pre-approval.
Keep up with your monthly bills
Make sure you are continuing to pay your bills even if you have a joint account with your ex. If your name is still on the account, then it will affect your credit score in the future. If you’re searching for a new home, then you want to keep your credit score healthy to get pre-approved for another mortgage and to prove to lenders that you’re able to pay your bills on time.
Be realistic with what you are able to afford
With the real estate market booming, you may not be able to financially afford the usual cost of living on your own. There are loans available, but only if you can actually pay them off going forward. You must get your mortgage refinanced or pre-approved and find a lender that trusts that you can still afford the mortgage or a new mortgage depending on your situation. If you work with a mortgage broker, they can determine how much you are able to afford each month on a realistic budget and arrange for a pre-approval. If a conventional mortgage doesn’t quite work for you. They can also look at alternative lenders for you.
Work with a trusted mortgage broker to explore your mortgage options when going through a divorce
You may feel that there’s a great weight bearing down on you when you’re getting divorced. But, there are options and there is help out there to make dealing with your mortgage and finances easier during this extremely difficult time. As a reputable mortgage broker and financial advisor, I can help you determine the best options and financial approach for you. With my industry-leading knowledge, I can help you save time and money so you can focus on other things in your life. Give me a call today at (705) 315-0516, and we can chat about how to get your finances and mortgage under control during your separation. I’m only a phone call away and I’m here to help you through this transition.