Brampton and Ontario Mortgage Blog
Protecting Your Credit After Divorce
March 28, 2015 | Posted by: Paul Hunjan
Divorce can be expensive, and many people fail to consider the effects of divorce and the cost of breaking up your mortgage. Depending on your personal and financial circumstances, keeping the family home after divorce may not be a practical option. Going from two incomes to one and having the same financial responsibilities such as mortgage payments, taxes and upkeep can wreak havoc on a suddenly single income.
What About Equity?
Home equity accrued during a marriage can be appraised and split between the parties. Often the spouse remaining in the home is mandated by the court to buy the other out and will have to refinance -- sometimes at a higher interest rate -- or take out a second mortgage.
How Can I Protect My Credit?
Despite a divorce, your credit may be adversely affected because you may still bear financial responsibility for mortgage payments on the home you no longer occupy. Your lender can advise you on the process of removing your name and financial obligation from the property and any costs associated from breaking up your mortgage after your divorce. Protecting your good credit in these circumstances is vital to your ability to finance another home in the future.
Paul Hunjan is a GTA Mortgage Broker who specializes in bad credit mortgages, refinancing, and renewals. Get in touch today to find a mortgage solution that's right for you.