---
title: Family Law Spousal Separation Mortgage
description: Mortgage financing options available in Canada for family law and other relationship breakdowns that allow parties access to equity/cash to payout the other spouse’s interest, extract equity to payoff joint debts, and to avoid disruption of being forced to sell and move.
---

[Spousal Buyout Mortgage Blog ](https://www.richardsmortgagegroup.ca/spousal-buy-out-mortgage-blog)

# [Family Law Spousal Separation Mortgage](https://www.richardsmortgagegroup.ca/spousal-buy-out-mortgage-blog/family-law-spousal-separation-mortgage)

 Written by [Chris Richards](https://www.richardsmortgagegroup.ca/spousal-buy-out-mortgage-blog/author/chris-richards) | December 11, 2018 at 3:47 PM

**Please be aware of the following high-ratio mortgage finance program as it relates to potential clients.**

**Program Application: **In situations where two parties are on land title to a property and in a relationship breakdown, where one party desires to keep the existing property, please be aware there are mortgage financing options that may enable your client to:

- Increase their access to equity/cash to payout the other spouse’s interest.
- Extract equity to payoff existing joint debts of the applicant to facilitate mortgage qualification.
- Avoid disruption of being forced to sell and move.

Program also applies to common-law partnerships, joint family purchases, or similar where the relationship is breaking down and the parties desire to financially separate their affairs.

**Solution: **As mortgage professionals, we have a number of lenders that will provide mortgage financing for the spouse-to-stay up to 95% Loan-to-Value (LTV). The financing is structured as a CMHC-insured purchase. This is different from refinancing, which is limited to 80% LTV, or from Release of Covenant.

**Criteria:** A successful mortgage application and approval will require the following:

- Both parties must be on the property title prior to the legal separation.
- Finalized separation agreement in advance or in coincidence.
- Offer to purchase from one spouse to the other.
- Appraisal confirming the current property value.
- Spouse-to-stay MUST be able to mortgage-qualify under standard mortgage lending criteria (income, credit, debt servicing, etc.)
- Spouse-to-go must be removed from the mortgage and title at funding.

*Example: $500,000 home value with existing $400,000 mortgage and $25,000 in joint debts. Parties agree to $50K cash for spouse-to-go from remaining equity. Refinance to 95% LTV yields $475K less $400K existing mortgage payout, less $50K for spouse-to-go, with $25K left for joint debt settlement.*

Please note, it is **very important **for either party to **determine their present and future mortgage options **including dos and don’ts as part of the financial separation process and **before signing off **on any agreement.

I would be happy to provide you, your colleagues, or your clients with a free consultation on these matters at any time. 

[View full post](https://www.richardsmortgagegroup.ca/spousal-buy-out-mortgage-blog/family-law-spousal-separation-mortgage)

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