When the clients speak to us about the options that are available, we discuss two main solutions:

1. Refinancing just in one name to have the other party removed from both the title of the property and the loan

2. Selling and using the proceeds of the property sale to calculate their new maximum borrowing capacity,

In the case of real estate owned by the parties, one of two things can happen. Either the property is sold, and the net proceeds divided between the parties, or one party buys the other’s interest in it.

In doing this the buyer has to refinance an existing mortgage into their sole name and pay the seller out.

The buyer’s capacity to raise funds becomes important here, as does the value of the property which will be security for the debt.

The transaction is completed when the existing mortgage is discharged and a new mortgage is registered, with the buyer as the sole mortgagor, the seller released and discharged, and the property transferred from joint names to the single name of the buyer.

In these circumstances where the client is separating, they may also be classed as a single parent. This could potentially lead to entitlement to the Family Home Guarantee Scheme, which means with as little as 2% deposit they may be able to avoid LMI and purchase a new home for their family.

Of course, affordability is generally the major obstacle here, so a lot of our clients will look at using any excess funds above the 2% to payout or consolidate debt to help with affordability.

“Thousands of dollars are saved by effecting a transfer in this way”

Apart from that, when a consent order or a BFA is in place, going forward, the parties have financial closure and security, protection for the assets they each retain and finality to their financial relationship.

"When emotions are involved, things are rarely straight forward as the client goes through a turbulent period of their life"

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