Relationship Breakdown and the Family Home
Relationship breakups are almost always difficult.
In what is already a challenging time emotionally, things can be complicated further when it comes to sorting out the financial side, particularly if there is a home and mortgage involved.
When you are at the point of finalising your finances, there are some things you may need to consider:
Future Ownership of the Home
The decision will need to be made around whether or not you will sell the home and divide the proceeds, or if one party is going to buy the other out. If one is going to buy the other out, understanding your borrowing capacity in order to do so is necessary. It is important to speak to your mortgage broker as early as possible so you can be aware of your options.
If one party is buying out the other, there are potential stamp duty waivers if your situation fits the requirements and the agreement is put through the Family Court. This is a complex process and it is wise to consult legal experts to assist you.
Make sure all utilities and other things relating to the property are transferred into the name of the party who is retaining the home. While things like council and water rates will be transferred as part of the settlement process, other costs associated with the property may need to be changed individually.
Looking After Your Credit Score
Keeping up with your payments and protecting your credit score is important for any future lending you may seek. You may have debts in joint names and it is important to finalise these as part of the process so that going forward your credit score is not at risk if your former partner does not pay their obligations. This process this can sometimes be difficult so it is vital to stay on top of what is owing, who is making the payments, and ensuring payments are made. There may be debts or credit facilities that you have forgotten are in joint names, so it is important to be diligent.
If you are going through a relationship breakdown and are looking at your situation regarding the family home, we can help you work through your borrowing capacity to see what your options are. Contact us for more information.