Want to Retain the Family Home but don’t know if you can afford to?
Unfortunately life doesn’t always go as planned. Sometimes we have to deal with situations that are not always pleasant or emotionally easy. Divorce and separation is one such event. Making decisions about who retains the family home and other property can be difficult.
Here are ten key Divorce and Separation finance items you need to know;
1. Property Options-There are three ways that existing jointly owned property can be dealt with;
a. You buy out your partner
b.Your partner buys you out
c.You sell the property, split the proceeds and buy another property.
2. Borrowing Capacity- Will you have sufficient borrowing capacity post settlement to cover the future loan repayments? Will the loan repayments increase if you have to finance the sharing of equity with your partner?
3. Income & Expenses-How will these change post settlement? Will they increase? Have you done a future budget?
4.Current Loan Repayments–Who’s responsible for making the loan repayments from now until property settlement? It is in your interest to make sure loan repayments are made on time to avoid the loan going into arrears.
5. Avoid Bad Credit–Keeping your loan and other debt repayments up to date will make refinancing easier and cheaper than if the loan goes into arrears or default.
6. Property Value–What’s the current value of your property or properties? Ask a real estate agent or two to give you an appraisal. Or, you can engage a professional Valuer.
7. Loan Balance-What is the current loan balance on your property loan(s) and other debts?
8. Equity Splitting-Have you estimated how much equity (if any) you will have to give to your partner if you take over the property? This will be added onto your existing loan when considering your borrowing capacity. Do you still have sufficient borrowing capacity?
9. New Loan Amount–How much will your new loan be and will it be more than 80% of the property value? If so, you may have lenders mortgage insurance to pay.
10. What to do First?- If you are considering buying out your partner and keeping your home and/or other property you need to know your future borrowing capacity. This will be critical in deciding your options. If you don’t have the capacity to take over the loan your options are simple. Either your partner does, or you sell.
For your free full copy of our Divorce and Separation Finance ebook, please Contact Us and type “Divorce and Separation Finance ebook” in the message box and we will forward to you directly.
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