Are You Getting Divorced or Separated?
50% of marriages in Australia end in divorce and more in separation after buying a home. Read on to see what you can do with your properties when you take different paths.
Buying out your partner
Unfortunately, separation and divorce aren’t easy processes. Even if you agree to property division, you may still have trouble handling:
- The property settlement figures.
- Credit blemishes from unpaid bills as a result of the divorce.
- Paying the mortgage, as parties will usually stop doing so under their solicitors’ advice.
- An unexpected separation – you may be unprepared to apply for a mortgage.
- How can you overcome these, and other challenges?
- Home loans to pay out your partner
You can get a mortgage to pay a divorce or property settlement or separation agreement, and this is viewed by lenders as a refinance, but also a purchase. Because of this, lenders will apply different criteria when assessing your loan:
- Like a loan for a purchase, you will need to show that you have the funds to pay out your partner.
- You do not need to show evidence of genuine savings, unlike a regular purchase.
- Like a refinance, you need to have a good repayment history on your current mortgage.
”Taking over” the home loan
You or your partner might choose to buy the other out, or you might decide to sell the property and share the proceeds from the sale. This is an easy way to divide assets. While in other countries you may remove someone from a mortgage agreement, or “take over” the home loan, this is not allowed in Australia. The loan must be refinanced solely in the name of the person retaining ownership of the property.
Missing loan repayments
While going through divorce or separation, it is common to miss repayments. Sometimes it is because of disagreements over who should be paying, others it is because the emotional chaos causes people to read more>>