Melissa Thimot Real Estate

Whether you are a friend of someone going through a separation, or the person navigating the separation yourself, there is something valuable here for you. A separation brings no shortage of difficult decisions, and one of the biggest is what to do with the family home. Selling and dividing the proceeds may be the right answer, but it is not the only one. If one spouse wants to stay, a spousal buyout may make it possible to purchase the other person’s share and place the home and mortgage in the remaining spouse’s name.

To the friend who knows someone separating

You may be the first person they turn to for a listening ear or practical advice. Sharing clear information about options like a spousal buyout can reduce overwhelm and help them see that keeping the family home is sometimes achievable. Pointing them toward experienced guidance early can make a meaningful difference at a stressful time.

To the person going through a separation

You do not have to figure this out alone. Experienced brokers and agents work with these situations regularly and can walk you through the numbers, the paperwork, and the realistic possibilities so you know what options exist. There are solutions available, and having the right support can bring a measure of certainty when so much else feels uncertain.

More than a standard refinance

In a conventional refinance, homeowners are generally limited to borrowing up to 80% of their home’s value. A qualifying spousal buyout may instead be treated as a purchase transaction, potentially allowing financing above that limit through an insured mortgage.

For example, on a home valued at $600,000:

• A conventional refinance would generally be limited to $480,000, or 80% of the home’s value.
  

• A qualifying spousal buyout could potentially provide up to $565,000 before the mortgage-insurance premium.
  

• That could make up to $85,000 in additional financing available to complete the buyout or address eligible joint debts included in the separation agreement.
  

For illustration, at a mortgage rate of 4.50% and a 25-year amortization, the monthly payment would be approximately $2,657 under the conventional refinance limit, compared with about $3,252 if the maximum spousal-buyout amount and mortgage-insurance premium were financed.

These figures are for illustration only, as the amount available and monthly payment will depend on the home’s appraised value, the required buyout, the existing mortgage, applicable insurance premiums and the rate available when the financing is arranged.

The funds are generally used to pay out the existing mortgage and the departing spouse’s agreed share of the equity. Depending on the lender and mortgage insurer, certain jointly held debts addressed in the separation agreement may also be included.

What lenders will consider

The spouse keeping the home must still qualify for the new mortgage based on their income, credit, other debts and the applicable mortgage stress test.

Child or spousal support received may help with qualification when it is properly documented and expected to continue. Some lenders may use 100% of qualifying support income, while others apply different limits or documentation requirements. Support payments being made must also be included when the lender assesses the borrower’s obligations.

Lenders will typically ask for:

•  A signed separation agreement setting out the division of the property, debts and any support obligations;

• Documentation supporting the transfer and agreed buyout amount;
  

• An appraisal confirming the home’s current value; and
  

• The legal transfer of the departing spouse’s interest in the property.
  

A signed separation agreement can also be important if either spouse plans to purchase another home. A signed separation agreement can also be important if either spouse plans to purchase another home. Requirements will vary by lender and province, and a signed agreement documenting the borrower’s financial obligations may be needed before completing financing connected to a separation..

There may also be mortgage-insurance premiums, legal fees, appraisal costs and, depending on the province and circumstances, land-transfer or registration costs. Any penalty for breaking the existing mortgage must also be included in the calculation.

This may sound complex, but you don’t have to navigate it alone. I have the knowledge and resources to guide you through the financing process, explain what documentation is needed and help keep the transaction moving at each stage.

Start the conversation early

If you or someone you know is going through a separation, reach out before finalizing the agreement or making decisions about the property. I can confidentially review the estimated buyout, qualification requirements and potential monthly payments so you have a clearer picture of what may be possible.

Paul Macara
Mortgage Broker
(250) 857-4741
paul@macaramortgages.com

Scrolling through listings is the fun part — but before you start picturing your furniture in every home you see, there are a few things worth doing first.

Buying a home is a big decision, and having a little preparation behind you can make the entire process feel much less overwhelming. If you’re thinking about buying in Greater Victoria, here are six things I recommend doing before you start seriously house hunting.

1. Get Clear on Your Budget

Before falling in love with a home, it helps to understand what you’re actually comfortable spending each month — not just the maximum amount you may qualify to borrow.

Remember to factor in expenses beyond your mortgage payment, including property taxes, strata fees if applicable, utilities, insurance and ongoing maintenance.

A price point that leaves you some breathing room can feel very different from one that stretches your budget to its limit.

2. Get Pre-Approved for a Mortgage

A mortgage pre-approval gives you a much clearer idea of your purchasing power and can help you shop with confidence.

It also means that when the right property comes along, you’re already further along in the financing process and better prepared to make an offer.

3. Make Your Must-Have List

It’s easy to get distracted by beautiful kitchens, staging and finishes, so before you start viewing homes, make a list of what actually matters to you.

Consider things like:

● Number of bedrooms and bathrooms

● Commute and location

● Outdoor space

● Parking

● Schools and childcare

● Pet-friendly strata rules

● Walkability

● Renovation tolerance

Separate your list into must-haves and nice-to-haves. Very few homes check every box, so knowing your priorities makes decision-making much easier.

4. Explore More Than One Neighbourhood

Greater Victoria has so many different communities, and sometimes the neighbourhood you end up loving isn’t the one you initially had in mind.

Langford, Colwood, View Royal, Saanich, Esquimalt and Victoria all offer different lifestyles, housing options and price points.

Spend some time driving or walking through potential neighbourhoods. Visit at different times of day, check out nearby parks and amenities, and think about what living there would actually look like day to day.

5. Think Beyond the Listing Price

The purchase price is only one part of buying a home.

Depending on the property, you may also need to consider closing costs, inspections, legal fees, property transfer tax, moving costs and any immediate repairs or updates.

For condos and townhomes, reviewing strata documents, fees and contingency funds is also an important part of understanding the bigger financial picture.

6. Connect With a Realtor Early

You don’t need to wait until you’re ready to write an offer to reach out to a Realtor.

Starting the conversation early gives you time to ask questions, learn how the buying process works and get a better understanding of what’s available within your budget.

It also means we can keep an eye on new listings together, narrow down your search and make sure you’re ready when the right home comes along.

Ready to Start Looking?

You don’t need to have everything figured out before beginning the conversation.

Whether buying your first home is something you’re hoping to do this year or you’re simply trying to understand what your options are, I’m always happy to help you figure out your next step.

Thinking about buying in Greater Victoria? Reach out anytime — I’d love to help you get started.