What happens if neither spouse can qualify alone?
Options include: (1) selling the property and splitting equity, (2) one spouse keeping the home with a co-signer/guarantor, (3) negotiating a delayed sale clause in the separation agreement allowing the custodial parent to remain until children reach a certain age, (4) private lending as a bridge solution.
Each option has distinct financial and legal implications.
Primary sources
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Related Questions
How do you structure a 95% LTV refinance for a buyout?
Technically, this is structured as a 'Purchase' from one spouse to another, which is why it qualifies for 95% LTV (insured) instead of the 80% (conventional) refinance cap.
What are the core 2026 documentation requirements?
Lenders will not touch a buyout file without a final, signed Separation Agreement.
Can a spousal-buyout borrower use the first-time buyer 30-year amortization?
A spousal buyout does not by itself create first-time buyer status. Insured 30-year amortization is available only when that borrower meets the first-time buyer test, or the home is newly built, under CMHC Home Start.
What is the biggest risk in a spousal buyout file?
The single most common failure point is the 'Income Gap.' Most families qualify for their home on two incomes; qualifying on one income while paying support is extremely difficult under the stress test.