You're either going through a divorce, contemplating it or renting until you can figure out the next steps. Likely your biggest challenge is the support payments are killing your mortgage approval for a house.
Top 4 Issues for divorce families:
#1 issue I see often is clients ruin their credit in the process of closing creditor accounts and being late on joint mortgage payments waiting for the dissolution. We work with them to ensure they meet mortgage standards for qualifying: rule of two's - 2 trade lines, 2 years history, $2500 minimum limits and NO lates on mortgage payments.
#2 issue, they spouse with the big spousal/child support payment now can't get a mortgage as that payments is a big liability.
#3 issue, don't have enough money for a downpayment to buy another place after paying out debts.
#4 issue, don't have enough money to pay the legal fees, so get stuck in the cycle of not getting proper legal advise.
Solutions!
With divorce rates well over 30% in Canada, it is only a matter of time before you or someone you know will need your help with a solution. I work with a few lenders that able to make mortgage financing easier for the post divorcees. Here are a few ways in which we can help:
Flex Down Mortgage Program - There are a few lenders that still allow clients to borrow the down-payment. I work with all of them.
Dissolution of Relationship Programs – these programs are available through most Mortgage Insurers. Allowing clients to effectively refinance their home to 95% Loan to Value to assist them in purchasing the matrimonial home from their spouse or help with legal fees. This is also known as the "spousal buyout program".
THIS IS A BIGGIE! Deduct Support or Alimony from Gross income – MOST lenders don't allow this, but we have a lender that will allow them to deduct the alimony or support payments from gross income, rather than showing the payment under liabilities. This will reduce your TDS Ratio on average by 10% or an average of buying a $250k condo vs a $400k home to raise their children.
Getting a "1/2 interest mortgage" to help with legal fees. If they have sufficient equity in their home and both are on title, we have an option for one party to get a 1/2 interest mortgage, without the other party knowing. This will help to get the legal proceeding started.More about this here.
Wherever you are in the process, let me put you on the Divorce Plan that will ensure your life transition is smooth and easy. It costs nothing for a consultation, and in most cases it costs you nothing to have a licensed mortgage expert to work with you.
Kiki Berg, Licensed Mortgage Expert
778-808-7756 kiki.mortgages@gmail.com