Making the decision to separate is often a difficult one and restarting the next chapter can be daunting.

It is possible to reapply for a Mortgage for a different home or even purchase the marital home.   Here are a few of the most important things to keep in mind;

Credit:

Keep all of your credit payments up-to-date including all joint credit.  This includes the mortgage (especially the mortgage), all credit cards, loans, car payments, lines of credit.   You must make the minimum payments on time.  If not, this could negatively affect your mortgage application.

Separation Agreement:  

A separation must be completed and it can be done by a lawyer or it can be done by the separating couple themselves and legally notarized.   For mortgage application purposes, we need to see the division of assets including the marital home and any spousal support or child support payments.   Child support can be used by the receiving spouse as income but must be counted as a liability for the contributing spouse.

Selling The Marital Home:

If selling the marital home, it is important to understand the doing bridge financing is going to be very difficult and or expensive.  Most of the major lenders in Canada will NOT allow a bridge loan to be funded during a separation as both parties have an interest in the property.  We usually recommend a gifted down payment from an immediate family member or trying to qualify using a borrowed down payment option.  If this isn’t an option, you may have to wait until the home is sold and the net sale proceeds are distributed by the lawyer.

Purchasing The Marital Home:

If purchasing the marital home, it is possible to purchase the home with as little as 5% down.  A new purchase agreement needs to be completed and the normal mortgage process will follow.

We have many excellent relationships with family lawyers in Winnipeg and would by honoured to help you through a difficult life change and help you start the next chapter.

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