Getting divorced: The things to consider when it comes to finances

By September 6, 2019Home Loans

Divorce is something no one ever expects or wants to have to go through. Setting aside the emotions involved, the process of untangling the day-to-day bits of your life (money, caring for the kids, the home loan) from someone else’s can be drawn out and (let’s be honest) miserable. Here are some tips that can make your experience a bit better:

Set yourself up for better times ahead

First thing’s first: keep in mind that you can (and bloody will!) get through this. Be kind to yourself. Let people know how you’re travelling, and don’t be afraid to ask for support. Try to keep things with your ex-partner civil. It might feel like a big ask right now, but any shared assets such as finances or home loans will need to be divided. This can be a frustrating and difficult process, so you’ll be grateful later on if you’re in a position to work amiably with them to secure a mutually positive future. 

Keep people who can help posted 

If your financial supporters and connections know what you’re going through, they can help. Try not to feel like this means you’ve failed – relationships are incredibly hard. Your financier is on your team, and they want you to succeed. If you’re open about your circumstances, they can offer support so you can get through this difficult time. They can talk you through your options when it comes to home loans and finances.

Take note and tick the boxes

Divorces can involve a lot of legal nitty gritty. To ensure you’re best prepared to walk away with the things you need for a successful and happy future, make sure you have copies of any important documents such as bank statements, tax returns, superannuation, etc. With these, you can get a professional to help assess your circumstances, including who is entitled to what, and whether you will need to sell if neither party is in a position to continue paying the mortgage alone. The more clarity you have for resolving these things, the better.

To sell or not

If you and your former partner own a house together, there are two ways to handle this. 

By refinancing the mortgage and buying the other person out, one of the partners could choose to take full ownership. Key to this will be seeking expert legal, real estate, and financial advice on how the value of the property should be split, and to make sure any pitfalls along the way are avoided.

The alternative approach is to sell. As a part of this, if you haven’t finished paying off your mortgage, you will need to do so with the proceeds of the sale. The difference left will be the total equity, and will need to be divided between the parties. By having the property appraised in advance, you will be able to estimate the total equity. Consulting professional legal and financial advice is again highly advisable in this case to make sure everything goes as smoothly as possible.

Sarah’s tip – it’s not worth it long term nor the solicitor fees, to drag out a settlement over smallish amounts of money like $10k, $20k even $50k depending on your circumstances. Put your pride to the side and settle, in the long term you’ll thank yourself.

Try to remember that even though it seems so hard right now, many others have gotten through this before you and gone on to flourish, and you can too. 

To find out how we can support you with your finances through divorce, contact us here