Frequently Asked Questions
Do you only do Separation Mortgages?
No. Although we have helped create the specialized category of ‘Separation Mortgages’, as a full-service broker that works with over 70 financial institutions we provide mortgages of almost any kind – regardless of the situation driving a client need. Separation Mortgages are unlike any other kind of mortgage what makes it different is the difficult and complex emotional and financial situation in which they are shopped for, negotiated and secured. Separation Mortgages is jut one area of our broader mortgage brokerage portfolio that addresses the modern realities that have changed the mortgage business and enforced for the need for an ‘updated’, long-term relationship and approach.
What do I do if my mortgage is renewing during my time of separation of divorce?
While every situation is different, most often at times of separation and divorce we advise clients to use convert their mortgage into a fully-open mortgage (no penalty) or a one-year fixed rate. At the time of renewal the lender provide a list of renewable terms (ie. term lengths, variable vs fixed) and you should attempt to coordinate your renewed mortgage terms with the date (range) for receiving your signed and binding separation agreement. Making the right decisions at the time of renewal depends on each individual’s unique situation (beyond just cases of separation/divorce) can save you thousands of dollars.
What types of mortgages should I avoid during my time of separation of divorce?
Separation and divorce is only one of the modern realities that has changed the mortgage business. For clients facing uncertainty or change of any kind, it is generally advised that they avoid longer fixed term (5 years) mortgages with a major band or anything greater than 5 years with any lender. Despite typically offering attractive (lower) borrowing rates, the rate combined with the longer term usually comes with restrictive conditions (i.e. no-sale clause) and significant consumer penalties associated with a ‘break’ and can ultimately limit your ability to qualify for another mortgage.
My spouse and I have joint debts, should I/we continue paying the bills despite uncertainty about how joint funds are defined during this period?
Absolutely. Although separation and divorce call into question the definition and control of ‘joint funds’ it is critical that all debts are paid on time. In fact, given that this process will most likely trigger many financial transactions the inability to properly service debt will impact your credit rating and potentially your ability to access financial products at the best rates. Be sure to document all transactions and the source of funds used during this period. A good mortgage broker, who is engaged early in the process, can work with you and members of your legal team to assist in both finding a mutually agreeable solution and documenting transactions.
How do I manage paying the significant costs, like legal fees, associated with divorce?
Separation and divorce can be expensive with legal fees alone often exceeding $20,000. During this time the definition of ‘joint funds’ is often in questions and spending limited making payment from personal funds or credit cards difficult and or costly to service. However, there are options. In non-adversarial or collaborative divorces we recommend that the spouses agree to use equity within their home to develop a fund that can be drawn upon for agreed expenses. Another option, is for individuals work with us to seek a ‘separation loan’ (different than ‘bridge financing’) of up to $30,000 to manage expenses and debt serving during this uncertain time. Many times it is better to seek short-term financing rather than liquidating investments that may be performing well and or will trigger negative tax implications.
Do I need to reapply for my mortgage if I am staying in the marital home after the separation and divorce?
Yes. A divorce does require you to reapply for a mortgage as it impacts the covenants agreed to with your lender in your original application. However, by including a separation mortgage expert in the process that includes your legal team the ability to re-qualify will be considered in the structure of the binding separation agreement. It is important to engage with an expert early and we are specialized in helping get mortgages when they matter most.
What are the main benefits of working with me?
Enjoy strategy calls with us, discussing how your clients can qualify for a mortgage during a separation or divorce; discover how clients can qualify for a mortgage without a signed agreement; if a signed agreement exists, we can identify the best banks to proceed with; we’re creative in providing positive cash flow opportunities for clients; we’re easy to reach and approachable, often answering the phone or quick to call back!
When should I refer a client to John?
As early as possible is best so we can get to know the client and identify potential opportunities and pitfalls before it’s too late like proactively helping with credit repair or providing input on support payments, etc.
Do clients need to meet any criteria?
The only criteria is that there needs to be a property of some sort. Typically in a separation, there is the matrimonial home and: someone is trying to keep the home.; they will try and buy another home; some separations involve investment properties which is another reason why an expert broker is required.