What to do with your family home if you choose to split.
Updated: May 6, 2020
When a couple decides to go their separate ways, usually their largest asset is their family home. If you are married, no matter whose name is on title, you both have an equal right to 50% of the equity in the home.
A matrimonial home is defined under the Family Law Act as the residence occupied by you and your spouse as your family residence. Both spouses have an equal right to possession of the matrimonial home.
If you are living common-law, you do not have the same rights. It is best to seek legal advice from a family law lawyer, particularly if you have cohabited for many years and have children together.
Your first step is to decide whether:
1. One person stays in the home and one moves on.
The person staying buys the other person’s share of the equity in the home. You can do this in several ways:
(i) Refinance the home to pay the other person from the equity;
(ii) Trade other assets, such as RRSPs, investments or other real property; or
(iii) Buy out the spousal support obligation from the payor spouse.
This is where a mortgage specialist is imperative. They understand that divorce is a special circumstance for which you are eligible to borrow a higher percentage of your home’s value (provided you qualify) to help you stay in your home.
2. You list the home for sale and both move on.
If you decide to sell your home, you split the proceeds. Home staging, decluttering and proper marketing are key factors to getting the most money as possible. There may be substantial prepayment penalties for breaking your current mortgage so be sure to call your current mortgage lender to find out exactly how much you owe.
In either scenario, you will need a realtor you trust to help you establish the current market value of your home. If you sell, your realtor will help you plan the best strategy to sell it quickly and for the most money possible. You will also need a real estate lawyer, either to transfer title or to help with the sale and eventual new purchase(s).
For more information, go to: www.debbiebraunhomes.kwrealty.com
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