Many couples in Ontario decide to sell their homes when they get divorced, deciding it’s easier to split up any money the sale brings in and find new places to live. However, this doesn’t always happen. One spouse may want to keep the house as part of the agreement.
If your spouse asks to do this and you’re fine with it, make sure you really aren’t listed on the mortgage paperwork. No matter how the divorce ruling goes down, your name may still be there.
One man found this out the hard way. He did everything he thought he needed to do, like telling the lender about the divorce and signing the title into his ex’s name. He thought he had nothing to do with that home anymore and that his ex-wife was going to pay the mortgage on her own. It’s what they both wanted.
When he tried to buy a new place to live, though, he found out the mortgage lender hadn’t taken his name off of the old loan. In fact, they refused to do so. Instead, they said his wife needed to go through the application process again to see if she could get the loan by herself—they’d applied for it together when they bought the house. Doing this wasn’t free, either, but would cost $5,000.
This story is important because it shows how complicated the property division process can be, even when both sides are in agreement and it seems like things should go smoothly. If you’re getting divorced, be sure you know everything you have to do to really split up your property and move forward.
Source: Reuters, “Splitsville? How to divide property in a divorce,” Geoff Williams, accessed Oct. 30, 2015