Sorting out financial obligations in the wake of separation and divorce can be complicated, and as interest rates continue to rise, repayments on a home you’re no longer living in can be stressful.
Essentially, if you and your ex are the registered owners of a property, it’s likely you’re joint account holders of the home loan as well.
The bank expects to be paid on time each month, no matter who has moved out and who hasn’t. If the loan is not paid on time, it can have implications for your personal credit rating, and the bank may end up possessing your home and selling it.
It’s not uncommon for the person who is leaving the home to believe that he or she should no longer contribute to the home loan payments, since it’s likely they’re now paying rent elsewhere.
You can contact your lender and ask if they are prepared to put a hold on the mortgage repayments or accept reduced repayments – such as interest only repayments – while you and your ex attempt to resolve your property matters.
It is also a good idea to contact your bank and ensure that any redraw facility connected to the mortgage is cancelled or altered to require joint signatures.
It’s possible to take out a joint mortgage and both remain responsible for the debt until it is repaid, but many couples would clearly prefer to disentangle their finances for good after separating.
Your options could include:
- Selling your home outright and sharing the profits
- Selling your share of the property to your ex
- Buying out your former partner’s share of the property
There’s no “one size fits all” solution, and your options will depend on your level of income and any childcare obligations you both have.
Speaking to a mortgage broker or financial advisor is a good idea, as well as speaking to a family law expert.
If you have questions about property settlements, who pays what, or any other aspect of family law, contact the experts here at GLG Legal Springfield.
We’re here to help you through this time. Contact our office on:
(07) 3288 3511 or email: info@sprinfieldlegals.com.au