So you and your partner are going your separate ways, and after negotiations, legal advice, court orders, and all that jazz, it is decided that you will be taking over the mortgage.
“I can just ‘take them off’ the mortgage, right?” Wrong.... In Australia, you must refinance your current home loan from joint names into your sole name. This requires a full application for finance, including an updated valuation on your property, to ascertain your equity position, and verification of your income and a serviceability calculation to ensure you can afford the repayments on the loan by yourself.
- It is essential that you:
Keep making payments on your home loan – your repayment conduct will be judged when applying for your new home loan.
- If you have missed payments –talk to your broker before proceeding with an application for finance, as there are lenders that accept late/missed payments (however the interest rate is usually higher).
- Request that your bank requires both signatures to make withdrawals from your current loan/redraw/offset/savings accounts.
- Seek legal advice from a mediator/family lawyer, even if you are on amicable terms with your ex-spouse. Family law is complex! We have excellent cost effective mediators and family lawyers that we can recommend.
- Engage a reputable settlement agent – get the right advice so that you don’t receive a bill for stamp duty.
- Get us to order an upfront bank valuation on your property to ascertain your equity position – with ‘soft’ valuations currently being experienced in the Perth property market, your house may not be ‘worth’ what you think it is.
- Talk to your Amplified broker before approaching a bank – we can do all of the background work and policy checks to give you the best chance of an approval.
We are here to help you through this tough time, so please reach out for more information.