Separating from your partner can be an emotionally challenging time, and it’s important to address the practical aspects of your financial obligations, especially when you have a mortgage. If you intend to keep your family home, understanding your options and seeking professional advice becomes crucial. That’s where a mortgage broker can assist you in navigating the complexities of your mortgage situation during this transition.
What do I need to consider about my mortgage when separating?
When you co-own property and share a mortgage with your partner, both parties are jointly and severally responsible for meeting the mortgage payments in their entirety. Even if you have moved out, you still need to ensure your part of the mortgage is covered. Failure to meet mortgage payments could have negative consequences on your ability to borrow in the future.
Considerations when keeping your home
If you decide to keep your family home, there are several considerations to keep in mind regarding your existing home loan:
- Establishing a new loan: Taking over the mortgage by yourself requires the establishment of a new loan. The lender will assess your individual borrowing capacity, allowing you to settle your old mortgage and buy out your ex-partner.
- Property valuation: Your home will need to be revalued to determine its current market value. This valuation helps determine the buyout amount for your ex-partner’s equity share.
- Additional costs: Keep in mind that legal fees for settlement agreements, property valuation and conveyancing, transfer fees, lender’s mortgage insurance, and potential taxes need to be factored into the financial arrangement.
The role of a mortgage broker in your separation journey
To gain a clear understanding of your borrowing options, it is advisable to engage the help of a mortgage broker. A broker who understands the challenges of separation can assess your unique situation, explore various lenders, and determine the feasibility of your plans. They will help you comprehend the income criteria for your loan application, assist in obtaining pre-approvals, and guide you through the loan application process when the time comes.
When should I speak to a mortgage broker?
Many people going through a separation choose to speak with a broker early. It is a good idea to get a picture of your borrowing power and financing options before you start negotiating your settlement with your former partner. This will help you know whether buying out your partner is an option for you or if selling your property is the right choice.
By obtaining a comprehensive understanding of your financial standing early on, you can reduce stress and expedite the process of moving forward. A mortgage broker’s expertise and industry knowledge can be invaluable in securing a stable financial future post-separation.
Discover a streamlined separation process with The Separation Guide
At The Separation Guide, our mission is to simplify separation and divorce, making it more manageable and less stressful. We provide access to a network of professionals who specialise in various aspects of the separation journey, including finance and mortgage broking. By taking our free three-minute Q&A, you can connect with a qualified mortgage broker who can support you through this challenging time.
Take the first step toward financial stability and a smoother separation process. Explore your borrowing options, understand your obligations, and ensure a secure future with the help of a knowledgeable mortgage broker.