Homeloans and Break Ups, What Happens Next?
Unfortunately, one of the realities of purchasing a home together is that relationships fail. Sorting out the financial aftermath, especially if the breakdown is not amicable, can be a complicated and emotional process to go through. I aim to give a few tips to consider when going through a breakup where finance is involved. This is a blog, and please do not construe this as legal or financial advice, it is not. This is a mortgage broker giving a few tips after being through the process with clients form a loan perspective before. Your specific circumstances are specific to you, so you should seek advice from an expert, which brings me to my first tip.
Talk to the Experts
When it comes to breaking up, especially if they are not amicable, it always pays to speak with a good legal expert to make sure all your bases are covered and that the finances are being split fairly. A good family lawyer will be able to assist here. Obviously, if those involved can divide their assets and liabilities up fairly and amicably, that would be the ultimate prize and avoid unwanted costs. However, this is not the case more often than not, so it would be good to make sure you are across what you are entitled to and what is fair.
Once it gets to the stage of trying to split up the liabilities, a good finance expert can assist in restructuring your debt that you may have left. Castle Mortgages are Mortgage brokers in Adelaide who are very good at what they do, get in touch with us if you would like to have a chat.
Keep Paying Your Debt
One of the most common issues that crop up from my perspective when it comes to breakups is that due to a breakdown in communication or a malicious way to try and get back at a partner, they will stop paying their share of the credit card or mortgage. This makes the separation of finances once everything has finally been agreed to exponentially harder. All that happens in this scenario is that one or usually both parties will have their credit record tarnished, making obtaining new finance through a competitive lender almost impossible. This means that you are going to be stuck together financially for a lot longer than was necessary. So no matter how messy it gets, please try and all pay your current commitments until you have financially separated.
See What You Can Afford
Once it has been decided that separation is going to happen, it pays to go and have a chat with a mortgage broker to see what lending options are available to you. One person may want to keep the family home and pay the other out of their share. The same could be said for a joint credit card that you may want to pay out totally. Talking with a broker would clarify if you could take on the full mortgage debt on your own and pay out your partner. Finding out that you could not could significantly change how you move forward, ie now having to sell the property and go your own way. Finding out from the onset what you can or cannot afford may make the road and decisions a little easier. If you would like to have a chat with great mortgage brokers in Adelaide, contact Castle Mortgages.
You Need a Court Order or Signed Legal Agreement
The final step before new finance can be settled, and lenders will need a signed court order or legal agreement. This is to make sure that things are finalised and divided up, and that a disgruntled partner is not going to come and take the house or the like after the fact. This is one of the final pieces of the puzzle but can take the longest to eventuate.
As discussed before this is a blog and is not intended as advice, you should always speak to a professional when it comes to your individual circumstances. If it is with regards to debt structuring, we are here to help.