Heading to a divorce… - Fred & Martin

Sadly, 40% of marriages end in divorce. 60% of second marriages end in divorce. 73% of third marriages end in divorce. Only 8% of Canadians have prenuptial agreements, despite this high divorce rate. An average of 25% of couples report that money problems played a role in their divorce. In 41% of cases, money problems serve as the “last straw” among many other issues that have already weakening the marriage.

A mortgage broker can play a helpful role in assisting couples going through a divorce with their mortgage-related matters. While they are not legal professionals, mortgage brokers specialize in mortgage financing and can provide guidance and support in the following ways:

Buyout by one spouse - refinancing options: If one spouse wishes to keep the family residence after the divorce, they may need to refinance the mortgage in their name alone. This involves determining the value of the property and compensating the other spouse for their portion of the equity. A mortgage broker can help explore refinancing options, and assist in obtaining a new mortgage that meets the individual's financial situation and requirements.

Assessing affordability: A mortgage broker can assess the financial viability of keeping the family residence by evaluating the individual's income, credit history, and overall financial situation. They can help determine if the person can qualify for a mortgage on their own, and provide insights into the affordability of the property.

Mortgage assumption or transfer: Depending on the circumstances, it may be possible to transfer the existing mortgage to one spouse's name or assume the mortgage fully. A mortgage broker can guide the couple through the process, explaining the requirements, and potential implications.

Exploring mortgage alternatives: In some cases, it may be more advantageous for one or both spouses to seek alternative housing options rather than keeping the family residence. A mortgage broker can help explore different mortgage options, and financing solutions that align with the individuals' needs, and financial capabilities.

Providing financial advice: Mortgage brokers often work closely with other financial professionals, such as financial advisors or accountants. They can offer referrals and collaborate with these professionals to provide comprehensive financial advice to divorcing couples, considering their mortgage, assets, debts, and long-term financial goals.