August 01, 2014
A dramatic change in your personal circumstances can leave you feeling uncertain about your financial future. Mortgage broker, John Kennedy of Mortgage Choice in Mudgeeraba on the Gold Coast, looks at different options for you so you can move on financially after this stressful time.
There is an important point to remember. If you purchased your home in joint names then the contract will require either or both of you to pay the loan repayments. You and your ex-partner are both 100% responsible for the loan. You must continue to pay your repayments, or you both risk getting a poor credit history and this may impact on your ability to borrow in the future.
There are 4 options to consider
Sell the house and divide the proceeds
The idea of selling up, splitting the asset and moving on may be your preferred option but you need to do the maths first. Will half the proceeds of the sale minus cost of sale and the remaining mortgage, leave you with enough to start again? Is it worth considering other options to stay close to your social network?
Keep the house and buy out your partner
In Australia you cannot simply take over the loan repayments. The contract is still in both names and the house is still owned by both parties regardless of who is making the repayments. You will need to re-apply for a new loan under your own name. The bank will look at your income and credit history to ensure they are satisfied you are able to make the repayments.
You should also consider if you have the means to continue with other costs that go along with home ownership like rates, insurance, maintenance and utility bills.
John can help you look at your new financial position and your options. He can order bank valuations and look at your goals and what the current loan options are to assist you in your decision making.
Sell your half of the house to your spouse
It is important to get the valuation and the finalising of this decision done efficiently. It is also essential that all repayments are met until the date of the closing of your joint loan. This is the mortgage as well as all bills where your name appears including rates, telephone etc. even though you may not be living in the home. Failure to pay these bills may lead to you obtaining a bad credit history and having difficulties in the future lending.
This may be a consideration for partners, for example, to allow children to continue to live in the home until they graduate from high school. A detailed divorce decree will dictate the terms of future maintenance and eventual sale and division of the property and its proceeds.
The reassurance of having an expert on your side
For a confidential discussion of your financial goals contact our mortgage broker on 07 5559 2563 or send John an email at firstname.lastname@example.org and let him help you get back on your feet. We are convienently located in Mudgeeraba on the Gold Coast