Select a location from above to display BDMs
Contact a BDM
Lower Mainland, Island and northern British Columbia
Yvonne Futter Phone: 604.506.7114 Toll Free: 1.866.867.1777 Fax: 403.718.3042 yfutter@bridgewaterbank.ca
Headshot of Yvonne Futter
Edmonton, central & northern Alberta
Eric Doucet Phone: 403.806.8466 edoucet@bridgewaterbank.ca
Headshot of Eric Doucet
Manager, National Accounts
Eric Doucet Phone: 403.806.8466 edoucet@bridgewaterbank.ca
Headshot of Eric Doucet
Nova Scotia, New Brunswick, Newfoundland and Prince Edward Island
Paul Delaney Phone: 905.866.7162 Toll Free: 1.844.734.4762 pdelaney@bridgewaterbank.ca
Headshot of Paul Delaney
Manager, National Accounts
Eric Doucet Phone: 403.806.8466 edoucet@bridgewaterbank.ca
Headshot of Eric Doucet
Select a location from above to display BDMs
Contact a BDM
Lower Mainland, Island and northern British Columbia
Yvonne Futter
Phone: 604.506.7114
Toll Free: 1.866.867.1777
Fax: 403.718.3042
yfutter@bridgewaterbank.ca
Headshot of Yvonne Futter
Edmonton, central & northern Alberta
Eric Doucet
Phone: 403.806.8466
edoucet@bridgewaterbank.ca
Headshot of Eric Doucet
Manager, National Accounts
Eric Doucet
Phone: 403.806.8466
edoucet@bridgewaterbank.ca
Headshot of Eric Doucet
Nova Scotia, New Brunswick, Newfoundland and Prince Edward Island
Paul Delaney
Phone: 905.866.7162
Toll Free: 1.844.734.4762
pdelaney@bridgewaterbank.ca
Headshot of Paul Delaney
Manager, National Accounts
Eric Doucet
Phone: 403.806.8466
edoucet@bridgewaterbank.ca
Headshot of Eric Doucet

Refinancing the Home During Divorce or Separation

Divorce is unfortunately associated to another big ‘D’ word; debt. It’s common for couples going through a divorce to generate debt. Whether that’s splitting assets, lawyer fees or simply old debt incurred while married. As couples separate and work to reestablish themselves, they will be doing a lot of financial juggling and refinancing might be necessary to split the assets or rebalance the books.

In the most ideal circumstances, refinancing should save your client money month over month by paying off high interest debts or prove to be the most cost effective way to access the funds that they need.

Related: 4 Worthy Reasons to Refinance the Home

Sometimes refinancing makes sense and sometimes it doesn’t. Here’s a few things to consider when helping your clients.

  • How much does it save the client at the end of the day?
  • Do they need to remove someone off a title like a parent or ex-spouse?
  • Is there a penalty involved?
  • How much are the legal fees / lender processing fees / appraisal fees?

As a trusted mortgage broker, this is a chance for you to help someone rebuild after a personal loss. So while these situations aren’t fun to deal with, you can make a difference in someone’s life by helping them navigate through these difficult times.

Below are two examples of when it makes sense to refinance after a divorce

Scenario 1
LTV: 75%
Beacon Score: 569
GDS/TDS: 38%/38%

Lisa has reached out to you, her trusted mortgage broker, to talk about refinancing options. Lisa recently went through a divorce that led to her to miss payments on some high interest debt which has negatively impacted her credit score. She wants to refinance in order to settle these arrears and hopefully increase her credit score. She has a stable income and employment with support documents.

What she wants to do is to refinance her mortgage in order to pay all of her debts in full so she can start fresh. After all costs considered Lisa will be saving a few hundred dollars a month compared to her current situation and this makes sense for you to suggest a refinance.

Scenario 2
LTV: 70%
Beacon Score: 606
GDS/TDS: 25%/49%

Phillip has gone through a divorce that bruised his credit. He decided it was time to look at his options with you, his trusted mortgage broker. Right now, Phillip is involved in a consumer proposal which will legally give him immediate protection from debt collectors and enable him to arrange for partial repayment of the unsecure debt he has. As his mortgage broker, you know that he has provable long term income from employment. Phillip also has some tradelines positively reporting to the credit bureau to offset the recent debt issues.

Also read: Know The 5 Cs of Credit to Accelerate a Submission

Due to all of these factors, Phillip is a great candidate for debt refinancing. Including the cost considerations of a refinance such as legal fees, appraisals etc. Phillip will still save a couple hundred dollars a month that he can put towards his other debt repayments.  Phillip is also a great candidate for a shorter term mortgage as his rate may be a bit higher due to his circumstance. But with prudent debt repayment, he could be ready for a lower rate mortgage in a few years. You suggest this to Phillip and he feels relieved that you have his best interest in mind.

Takeaway: is a mortgage refinance during separation the right choice?

There are costs associated to refinancing and sometimes it makes sense and other times the math just simply doesn’t work out. Our business development managers and underwriters are deal packaging experts and are ready to have a discussion with you about your next refinance and get your deals done.

If you have any questions about refinancing for a client, contact your expert BDM now.

Up Next: Refinancing a Mortgage Following the Death of a Family Member

Need a Broker?

Learn More

Contact a BDM

Get in Touch
Tags
Sorry, our Twitter feed is down at the moment.
Copyright ©2024 Bridgewater Bank.