Making decisions during a divorce or separation can be emotionally taxing and financially challenging, especially when it comes to handling jointly owned property. In today’s video, we’re going to guide you through the steps involved in managing your property, paying out your partner, and navigating a joint mortgage.

Three Options for Property Division

During a separation, there are three primary ways to handle the property:

• Transfer Share & Payout: You can transfer your share to your partner and receive a payout.
• Sell and Split: Selling the property and dividing the proceeds between you and your partner.
• Taking Over Entire Mortgage: Assuming full ownership of the property by taking over the joint mortgage.

Paying Out Your Partner: Steps Involved

Paying out your partner involves several crucial steps, starting with a reassessment by the bank. Despite past payment history, the bank will reassess your situation individually to determine your eligibility and loan capacity.

Key steps in this process include:



• Legal Advice: Seek legal advice to understand the implications and potential pitfalls involved.
• Agreement on Price: Both partners need to agree on a price. Consulting real estate agents for property valuation can assist in determining a fair price.
• Formal Commitment: Ensure all agreements are in writing, preferably through a binding financial agreement or legal documentation.
• Mortgage Broker Involvement: Engage a mortgage broker to assess your repayment capacity and navigate the refinancing process.

Pitfalls and Considerations

Navigating this process isn’t without its challenges:

• Disagreement on Property Value: Varied valuations by different parties could lead to disagreements on the property’s worth.
• Timeframes: Delays in finalizing agreements may result in market shifts affecting property valuations.
• Mortgage Repayments: Continue paying the mortgage to prevent credit issues, even if the other party refuses to contribute.
• Financial Hardship: Communicate with the bank if facing financial difficulties. Seek alternatives like interest-only payments or hardship arrangements to avoid credit blemishes.
• Stamp Duty and Legal Protocols: Ensure proper legal documentation to avoid potential stamp duty implications.

Refinancing After Divorce/Separation

Refinancing post-divorce involves a full reassessment by banks. They scrutinize your financial history and property valuation, considering it a loan refund rather than a new purchase.

Considerations for refinancing:

• Reassessment: Be prepared for a thorough review, including your repayment history, income, and property valuation.
• Valuation Differences: Banks conduct their valuation, potentially differing from real estate agent appraisals.
• Separation Agreement: Banks often require a separation agreement to understand the property’s ownership status.

Additional Tips and Caveats

Separation brings specific considerations:

• Bank Valuation Discrepancies: If banks value the property differently, seek other valuations from different lenders.
• Legal Documentation: Obtain proper legal advice and documentation to avoid potential pitfalls and ensure smooth property transfer.

Conclusion

Navigating property division during a separation requires careful consideration and adherence to legal protocols. Seeking legal advice, maintaining mortgage payments, and understanding the refinancing process are vital in ensuring a smooth transition. Each step involves scrutiny from banks and legal considerations, emphasizing the importance of informed decision-making.

Always consult legal professionals and financial advisors for personalized advice to ensure a seamless transition during this challenging period of divorce or separation.

At PB Property we know a panel of great professionals that can assist you in any property matters.

If you are in the market looking for assistance Book a time now.