The importance of the separation agreement for getting a mortgage

The importance of the separation agreement for getting a mortgage

For some people getting a mortgage can be an onerous task. There are several factors that come into play that can make it even more difficult for a recently separated person to invest in a new property. It is advisable to wait until the separation is finalized before you purchase a new property. This will ensure that the dust has settled, all joint debts are taken care of and legal financial obligations like child support and alimony are outlined.

That being said, the divorce process can take years and many people don’t want to wait that long to purchase a new home. This is where the separation agreement comes in. For people going through the divorce process lenders will rely heavily on the separation agreement to dictate the mortgage they will approve. A separation agreement should outline everything from the division of the matrimonial home, to child support payments and alimony. It gives the banks and lenders a good idea of what your financial situation will look like post-divorce.

In some situations, a signed affidavit is enough to replace a fully executed separation agreement. This only happens when there is no matrimonial home (or it is sold already) and child support is not needed. The person wanting to purchase the property will have to swear in front of an officer of the court that they do not need child support to service debt, post-divorce. This affidavit can then be taken to the lenders and may be enough to help secure a mortgage, depending on your on the rest of your financial picture, without a separation agreement in hand.

About Tina Murray

Tina is a professional Mortgage Agent with Dominion Lending Centres - The Mortgage Source, Canada’s largest mortgage brokerage. She began her career with a major chartered bank but left in 2010 to start her career as an independent mortgage agent with Dominion Lending Centres. Tina enjoys keeping on top of the different products and services available through Dominion Lending Centres with both chartered banks and private lenders. She enjoys using her expertise in the mortgage industry to find a mortgage that meets her client’s financial needs. She specializes in purchases, renewals, construction mortgages and refinancing and works for her clients to find them the best deal for their mortgage. Call Tina today and remember: At Dominion Lending Centres - I've got a mortgage for that!