Dear Peak Money,
My partner and I have decided to split. We've been together for a couple of decades, not married, and have no kids—but we do own a house together (paid off), and it's worth a lot more now than we paid for it.
My ex wants me to buy her out at the current market value. The problem is I don't think I'll get approved for a mortgage that size on my single income, especially with high-interest rates. Should we sell and go our separate ways? Or can I stay in my house?
Sincerely,
Home Alone
Dear Home Alone,
Depending on the province you live in, look into the common law rules to see what you are entitled to since it can vary from province to province. It would also be worthwhile to see what a lawyer would recommend to you.
But first, speak to a mortgage broker to see if you can qualify to take on the mortgage yourself if you really want to stay. That said, I can't stress this enough: It isn't worth putting yourself in a financially precarious position.
- Another option could be splitting your other financial assets (investments) more in her favour so that you'd pay her less for the home. I'd make sure you outline your combined current net worth so you can see the whole picture.
The last thing you may want to consider is a Home Equity Line of Credit. Since your home is paid off, you may be able to access a portion of the equity in your home this way which you could use to pay her out. Typically you must repay interest every month, but it would be worth calculating how long it would take you to pay back the amount outstanding on the interest rate.
Again, I encourage you to speak to a lawyer before any transactions are made, to ensure there aren't any unknown implications. Good luck!
Janine Rogan is the Founder and CEO of The Wealth Building Academy, an award-winning Chartered Professional Accountant (CPA), TEDx speaker, and the author of The Pink Tax. She also publishes weekly videos on Youtube and shares financial tips and tricks on Instagram.