Half the house isn't half the settlement

Property and pensions are both family assets divided in a separation, and a well-drafted settlement often nets them against each other rather than settling each in isolation — otherwise one spouse effectively gets paid twice for the same overall split. This file's separation agreement did exactly that, which meant the raw 50% equity number was never the amount that was actually going to change hands.

Reading the equity split alone, without the pension side of the same agreement, would have overstated the buyout by exactly $28,000 — a figure set by the couple's own family-law pension valuation, not by anything the mortgage file itself could calculate.

Once both settlement pieces were read together, the mortgage math itself was ordinary — the entire complexity sat in confirming the correct starting number, not in the refinance structure.

At 64.4% loan-to-value on the $310,000 home, qualifying payment at 6.95% (4.95% contract + 2%) comes to $1,391/mo, for TDS of 30.9% against the remaining spouse's own $6,700/mo income — a materially easier qualifying test than the $82,500 raw equity share would have required, and the correct one under the couple's own settlement.

A mortgage associate licensed under New Brunswick's Mortgage Brokers Act treated the settlement documents, not the property alone, as the file's starting evidence.

First, requested the full, signed separation agreement before structuring anything — not just the section describing the home's equity split, since a partial reading would have missed the pension netting entirely.

Second, confirmed the $28,000 pension credit against the separate pension valuation both spouses' lawyers had already commissioned. That figure came from the family-law side of the file, not from any mortgage calculation, and the broker treated it as an external, already-settled input.

Third, structured the refinance around the netted $54,500 figure from the outset, rather than qualifying the file at the higher $82,500 raw share and then adjusting downward — avoiding a second round of underwriting once the correct number was confirmed.

The buyout funded at $199,500, on the netted $54,500 figure both former spouses' own lawyers had already agreed to, with TDS settling at 30.9%.

Because this file is a refinance between separating spouses rather than an arm's-length sale, and because how New Brunswick's real property transfer tax applies to a settlement-driven transfer sits with the closing lawyer rather than the mortgage file, no transfer-tax figure is stated here.

• 01Read the whole separation agreement, not just the property section. A pension or RRSP division elsewhere in the same document can directly change what a property buyout actually owes.
• 02A netting clause protects against paying twice for the same overall split. The raw equity share and the actual buyout can be meaningfully different numbers, both correctly derived from the same agreement.
• 03Treat an externally-set settlement figure as an input, not something the mortgage file recalculates. The $28,000 credit came from a separate pension valuation, not from anything a broker should be estimating.
• 04Structure the refinance around the correct, netted figure from the start. Qualifying at the wrong number first, then adjusting, wastes a underwriting cycle.
• 05A smaller net buyout can make an otherwise tight qualifying file comfortable. This file's TDS at the netted figure was materially easier than the raw equity share would have required.