Private Mortgage Solution for Spousal Buyout
What You Need To Know
A Spousal Buyout is an arrangement where a married couple with no prenuptial agreement will agree to a payment to end the marriage. This common arrangement is often used to avoid court battles and divorce proceedings. A spousal buyout agreement is used in a situation where the couple is in agreement to separate and dissolve the marriage, with both parties agreeing on financial terms and no-fault grounds for divorce. Essentially, there are no hard feelings between the two parties and the arrangement is dissolved amicably. This is the most common way of parting ways in a married or common-in-law couple.
Arranging for a Spousal Buyout can be an excellent way to make sure that one of the former partners remains in the home for as long as possible. This application requires a full appraisal of the property and the person remaining on Title needs to qualify for the full financial obligation to carry the mortgage burden after the divorce.
Alternatively, borrowers can consider a mortgage solution from private lenders who have more flexible lending guidelines focusing on the value of the property and less on the creditworthiness of the borrower.
At Canadian Private Mortgage, our clients know that we won’t steer them into any products or financial terms that don’t fit their personal goals.
Our private mortgage solution for borrowers with a Spousal Buyout arrangement is ideal for couples who are looking to return their financial situation back to normal after the divorce arrangement. Any proposed lending solutions will include an exit strategy that enables clients to get back to normal as soon as possible.
Lending Solution For Spousal Buyout
Protect Your Credit Worthiness After a Divorce
Protecting your credit score after divorce involved taking measures to prevent identity theft. Enrolling in credit monitoring services is a good way to keep track of changes to your credit history. Be on the lookout for suspicious mail or new accounts in your name, change online banking passwords and request account number changes.
Financing Options For a Spousal Buyout
The process of obtaining financing for borrowers going through a Spousal Buyout is much simpler done with a private lender than the process imposed by traditional lenders. Although private lenders will still ask to verify some information to satisfy their internal lending guidelines, in general, it may actually be faster and easier.
Private lenders assess a mortgage loan application based on the property value and its location in the neighbourhood. A property appraisal is certainly a requirement that borrowers will need to satisfy as part of the refinancing process.
Also, generally speaking, private lenders will allow higher loan-to-value (LTV) than traditional banks and lenders.
Private lenders are an ideal option since they are not tied to the same lending guidelines as traditional lenders which is limiting. Unlike bank loans, private lenders focus more on the value of the property and the borrower’s exit strategy to determine the terms of the loan. This means that they will not make any preconditions on the borrower’s credit score or debt to income ratio.
A big advantage of hard money lending is that you can beat traditional lenders’ interest rates and timeframes. While traditional banks are known for their long loan terms, hard money loans can close in just days or weeks. This is important in time-sensitive situations, such as a Spousal Buyout arrangement. Getting a Spousal Buyout mortgage loan approved faster helps you resolve your personal situation faster and avoid delays.
Origination fee can also be referred to as “commitment fee”, or any other name. It usually refers to the underwriting or processing fee. This fee can cover a variety of expenses, from processing the loan to underwriting the loan. The amount of this fee depends on the lender and the type of mortgage loan. It is always stipulated in writing so there is no bad surprise to the borrowers on the closing day. If you are not sure how much you are paying for your origination fee, it is a sign that you are not working with an ethical private lender. Be aware and find other private lenders who are transparent with their origination fees.
At Canadian Private Mortgage, we disclose our commitment fee clearly in writing from the beginning of the process.
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