Separation, child support and mortgage: what you need to know.

When you and your partner get together and jointly buy a house, it' only natural to assume everything will be happily ever after. But the sad truth is many relationships eventually end in separation, and that can have a dramatic impact on your mortgage.

Here are some potential scenarios to consider:
* Selling the property is sometimes the easiest way to put your joint debt behind you it releases the mortgage obligations and frees up any equity. However there may be a penalty for selling before the mortgage term ends.
* if you decide to keep the house, you'll probably have to buy out your partners's share. If this requires refinancing or second mortgage, keep in mind that you'll have to qualify for financing based on the your individual income, which is usually substantially less than the joint income you used the first time.
* Let say you decide to let your partner have the house and get yourself taken off the title. Keep in mind that the lenders still consider you jointly responsible for mortgage payments,so if your partner misses payments, your credit score will suffer too. What you need is a letter of release from your lender. This will make it easier to qualify for financing when you set up a home of your own.
* Child support and alimony payments can impact your ability to qualify for your next mortgage. If you're received these payments, they can generally be added to your told income when you apply for financing as long as you have proof that you're been receiving them reliably over time. If your paying child support and or alimony, that amount is generally deducted from your total income and limits the size of mortgage you can qualify for.

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Martin Darknell

Martin Darknell

Chartered Real Estate Agent
CENTURY 21 PowerRealty.ca
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