If you're going through a relationship break-up, it's not an easy time in your life but with the right people around you and the right advice, you can come out the other side in a better place.
In this blog we want to cover off the key people, options and processes to help make the financial side of things as simple as possible - and of course leave you in a positive position at the end of the day.
So who is important here?
Your ex-partner - It's always a lot easier if you can agree on what you each wish to achieve before spending money on lawyers etc. But you each should obtain some legal advice before putting pen to paper to ensure you're both looked after. Arriving at a lawyer's office with a basic plan will save you both money!
Valuer - Getting an independent valuation for your property means there is no debate about what it is worth and you can make clear plans for dividing assets. It is also going to be a requirement of the bank as above.
Lawyer - You'll need a lawyer to ensure the division of assets is done correctly and that you've got an agreement which is binding so you're both protected from any future claims. This does not have to be expensive and absolutely should not be nasty, just a case of making sure things are done properly
Us! - Your Mortgage Team - Not much in the world happens without money these days and it's important that for whoever wants to stay in the property they can afford to do so. Plus if there is to be a payout then the other person will likely want to buy a home too. Especially if children are involved as it allows you set things up for the future of your family.
What's the best process?
Beyond all the emotional turmoil that may be going on for you, there is always going to be some tie to a family home and most of the time one of the couple will want to stay.
To start the process of being fair to both parties, you really need to get an idea of what your property and this is where a Registered Valuer comes in. They can provide an independent assessment of the value of the property and create a report which can be used for the bank in assessing your future borrowing power.
Once this value has been established, it's time to get a pre-approval for each party to either purchase a new property, or remain in the existing one.
It's simple, if we follow a couple of key steps;
- We get asked often "can you please arrange to have X person taken off the mortgage?". What this refers to in most people's minds is that it's a simple process of removing a person's liability for the loan and transferring ownership. So for the person buying the house it’s actually a sale for the price agreed from joint names to one name.
- Any bank (whether it's your existing one or perhaps another bank who may offer you a better deal) will assess the party remaining in the property for their ability to service the debt associated, plus whatever amount is required to pay the other person out their share.
- This is a new application the same as any, and we'll arrange for a loan offer as normal to you've got the confidence you can borrow that money on your own.
- The bank will then need to confirm there is no further liability from or to either of you, usually in the form of a Relationship Property Agreement, which is prepared by a lawyer. Talk to us if you need a recommendation as we work with excellent lawyers all the time!
- We can work with both parties to ensure you are each looked after and with a broad knowledge of both sides, make the whole process easy for you.
- You will agree on a "settlement date" when the property will be transferred to the remaining person's name, and ideally the second person also is able to purchase a new property.
Making it easy
As with everything we do, we like to keep things simple and make it easy for you.
While this situation is not one you might have expected, we have dealt with numerous relationship property transactions and have all the tips and tricks to make it a smooth process, a work with a team of great professionals to ensure you feel understood and looked after.
Get in touch with us and get the ball rolling today!