Real Estate and Divorce in Kelowna
Given the soaring real estate prices prevalent across the country, couples going through divorce are left unsure what to do with their real estate investments. Not every marriage is going to work out. In Canada, approximately 40% of marriages will end in divorce. However, the financial stakes of getting a divorce are too high for even the 1% of Canadians. Especially when it comes to real estate. It has become incredibly difficult for most married couples to buy out the property in the event of divorce.
Learn more about divorce and real estate in Canada by reading the article below.
Problems With Keeping Real Estate During Divorce.
For couples going through a divorce, determining what to do with their real estate investments is tough. This is only amplified if one person decides they want to keep the house. Even if you have a substantial income, in today’s market, you may not be able to own a home on one salary. Unfortunately, this forces many separated couples to sell their house(s).
According to experts who deal with this sort of problem on a daily basis, the extreme cost doesn’t add up. 4 to 5 years ago, it was common for people to receive financial aid from their parents or other family members. However, now most people’s parents don’t have nearly enough to support their adult-child in a case like this. Previously, people would have the option to refinance their home and keep it. Although, given the condition of Canada’s real estate market, your income would have to be far above average to even consider refinancing an option.
Areas in Toronto and British Columbia have had the greatest surge in prices over the last few months. The gap between income and real estate prices is growing at an alarming rate. Such a profound division is causing divorced couples to remain in the same home. Even after years of being separated, there are several people who continue to depend on each other financially. Thus, leaving former spouses to split up their home by floor. It’s difficult for couples to own one home let alone two.
Problems are only amplified when it comes to dividing assets. Depending on who gives who what, purchasing a home can get even trickier. Some assets won’t be able to work as a downpayment. In many cases, parental and spousal support are not accepted as primary sources of income. Renting becomes the most viable option in these situations.
How to Avoid the Problems & Some Solutions.
In order to determine what the cost of keeping your marital home will be, it is important to contact a real estate agent. They can help provide an accurate assessment of the home’s value. This way, you can get a grip on what costs may lie around the corner. Getting a divorce when you aren’t in the financial position to do so, isn’t always the best idea. However, not getting divorced can cause an onslaught of other problems.
Many banks will not let you get another mortgage until a separation agreement has been finalized. The majority of separation agreements can take anywhere from 4 months to 3 years. And, the process is extremely costly and trying.
During the process of getting a separation agreement, you may see the assessed value of your home rise exponentially. This, affects the way agreements are calculated. The shift in cost makes it difficult to create a fair settlement without constantly reassessing the value of the home.
While it can be incredibly difficult to find a home and get back into the market, there are options. Certain mortgage agents will offer mortgages specifically for people who are coming out of divorce. Or, for those who are in the process of separation. If you search around, there are usually options available to accommodate your circumstances. For instance, some banks will accept support payments as income. There are also certain credit unions that are exempt from applying the results of your mortgage stress test.
It is certainly difficult to navigate real estate and divorce. However, this is not to say that it is impossible. With the right guidance and support, you can successfully separate from your partner.
Contact Us Today!
Contact us at Neufeld Jones today for more information on this topic. We would be happy to help provide you with the guidance you need during this difficult time. Our team has a variety of connections that we can put you in touch with to help during this process. Feel free to reach out with any questions or concerns that you may have about the value of your home or buying a new house. Be sure to check out our social media for the latest updates and more. We look forward to helping you out in the near future!