You may have brought your home together with your spouse and may be paying the mortgage together. Double payments make mortgages end faster and each one of you feels less burdened. However, there may arise an unfortunate situation such as a separation or a divorce due to which you may need to have a fresh look at how your mortgage payments will have to be made in the future. But there are some other options that need to be addressed as well. Who will stay in the house? When a married couple has applied for a divorce or separation, both the husband and wife have an equal right to stay in the home they shared before the situation regarding separation arose. None of them can sell, rent, or mortgage the house without consent from the other or if they have a court order to do so. If the couple wants they can stay together in the same house. A situation may arise that one of the spouses going through a separation may not want to live in the same house - they may then, choose to move out, but the obligation to make the mortgage payment remains. Who will buy the house?
One of the partners, at some point in time, may also want to opt out of the mortgage agreement and may demand the money they had contributed towards the equity. In such a case, the other partner can try to pay them out by refinancing their mortgage as it allows you to refinance up to 80% of the equity. But due to marital separation, opting for a spousal buyout mortgage can help you get up to 95% of this amount in equity. But the first step in putting into effect of a spousal buyout mortgage is to make sure that the marriage is over and there is no chance of reunification of the couple.
Rights of common-law couples Both parties do not have equal rights to stay in the home in case of separation of a common-law couple. If the property was brought as an individual it remains with the individual whether brought into the relationship or during the relationship. So, in the case of a shared home, the owner of the house can stay while the common-law partner would have to move out. However, there may be a situation where the house was bought jointly by the partner then they may decide to sell the house and share the money or one of the partners can buy the share of the other one. If, however, they have a legal cohabitation agreement that defines how the house will be dealt with in the event of a separation, the agreement becomes binding in such cases. To put the cohabitation agreement in effect, the couple would need to use the services mediator or a lawyer which would result in a buyout arrangement between the partners. If you want to know more about the impact of separation or divorce on a mortgage, or need help in clearing any doubts contact LendX Financial in Brampton, Greater Toronto Area.