Money Matters: Can I get a home loan as a single parent?
We enter relationships with the best of intentions. However, if it’s not happily ever after, and you have decided to separate, take the time to get your finances in order.
At Simple Separation, we are committed to helping separating couples have access to resources to help them navigate the pre-separation process.
In this blog, we asked the Founder of Uploans, Kirsty Dunphey, a few common questions she gets asked from couples who decide to separate or divorce.
Q: Are our finances separate now that we have separated?
K: Just because you are living separately or separated (under the same roof), does not mean your finances are separate. In the absence of an agreement, it is important to have an interim understanding on the finances, such as how will the mortgage be paid, expenses shared, etc.
Q: Who pays the mortgage when we decide to separate?
K: It's important that you look after yourself in this case. And what I mean by that may be different to what you think when you read it! If you're a borrower on the home loan, then whoever pays or doesn't pay the home loan is irrelevant to your credit rating. If there is a missed payment even if you've paid your share perfectly it will look like you have defaulted. That's why it's key not only to talk about these things up front but also to vigilantly check to make sure that any payment arrangements are being made by any party who has agreed to it.
Q: If my ex stops paying how can I protect my credit rating?
K: You need to contact your bank as quickly as possible, explain the situation and get legal advice.
K: Q: Can I get a home loan as a single parent?
Absolutely - I get home loans for single parents all the time! It's my specialty. We just need to be mindful of how banks treat your income. Some complexities can be around the ages of kids if you're receiving child support or family tax benefit. Single parenting payment is also a tricky one, but we have some banks who will include it. And it's key to discuss expenses for the kids such as education / extracurricular activities so we're presenting a stellar application to the bank. In short, it's very possible, but it can be tricky and will take time, so you want someone guiding you on it who is an expert.
Q: What should I be doing to ensure my property isn't at risk during separation proceedings?
K: Get appropriate legal advice early in the piece and keep things amicable where possible with all parties doing the right thing as far as paying joint debts.
Q: What is spousal transfer?
K: This is where one party will take over a property that's currently in joint names. This is the most common form of deal I do for separating parties. We work with the person who's going to take over the loan to work out their borrowing capacity, get a pre-approval in place and then the transfer goes through once the legal agreement has been reached.
If you’re looking for further advice on getting a home loan as a single parent, contact us today!
Simple Separation is a complete Mediation and Legal information service that assists couples to legally finalise their separation from start to finish online. All legal services are provided by our preferred panel of the best independent Family Lawyers, Estate Planning Lawyers and Conveyancers who share the same philosophy - to separate simply, fairly and respectfully.