Separating, whether through divorce or ending a common-law relationship, is tough, but it doesn’t always mean losing your home. Many feel they must sell, but there’s an alternative worth exploring: the Spousal Buy-Out Program.

This often-overlooked option can help you stay in your home, especially if you have children in school or are happy in your neighborhood. While it may not be right for everyone, it offers a potential solution to maintain stability during a challenging time.

This program, supported by Canada Mortgage and Housing Corporation, Sagen™, and Canada Guaranty, enables one partner to refinance the home up to 95% of its appraised value. Both parties must currently be on the property deed to qualify. This program also offers a one-time chance to pay off other debts outside of the separation agreement, helping with the transition.

If you’re interested in keeping your shared home and think this program might work for you, here’s what you’ll need:

1. Appraisal Report: Typically, this report is used to determine asset equalization. It should be ordered by a third party and produced within 90 days (or less with some lenders) to ensure accuracy. If the original report is older than 90 days, a new one must be obtained.

2. Signed Separation Agreement: You’ll need to provide a signed copy of the separation agreement, detailing asset distribution.

3. Agreement of Purchase and Sale: This standard agreement should reflect the new ownership arrangement.

4. Employment Letter or Recent Pay Stub: The lender will need this to verify your ability to manage mortgage payments.

5. (Optional) Debt Payout List: If you choose, the Spousal Buy-Out can also help pay off additional debts outside the separation agreement. The proceeds can be used to buy out the other owner’s share of equity or pay off joint debts as specified in the separation agreement.

You might be concerned about affording this option, but don’t rule it out just yet! The Spousal Buy-Out Program is designed to support you and can include a co-signer (such as a family member or new partner) to help with costs.

Moving forward can be challenging, but there are solutions available. If you’re navigating a divorce and unsure how it will impact your mortgage, please contact me today for assistance.