🏠 Property Settlement Specialist

Home Loans After Divorce & Separation

Buy out your ex-partner, refinance to remove them from the loan, or purchase your fresh start. Confidential, judgment-free advice.

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Common Property Settlement Scenarios

We help with all aspects of property settlement financing during separation or divorce.

🏡 Buy Out Ex-Partner's Share

You want to keep the family home. You need to refinance the existing loan and pay out your ex-partner's equity share.

Example:

Property value: $800,000

Current mortgage: $450,000

Equity: $350,000

Ex-partner's 50% share: $175,000

New loan needed: $625,000 ($450K existing + $175K buyout)

🔄 Refinance to Remove Ex-Partner

Property settlement is complete. You keep the house, they keep other assets. Now you need to refinance in your name only.

Key Requirements:

  • Prove you can service the loan on your income alone
  • Court orders or binding financial agreement
  • Ex-partner must sign discharge documents
  • May need to show cash payment to ex-partner occurred

🏠 Purchase New Property

Starting fresh. You've received your settlement payout and want to buy a new home for yourself (and potentially children).

Considerations:

  • Settlement funds can be used as deposit
  • Lenders assess your solo income only
  • May qualify for first home buyer benefits if you never owned property in your name
  • Child support received may count as income (if verified)

💰 Equity Release for Settlement

You need cash to pay your ex-partner their share but want to keep the house. Refinance to release equity.

Example:

You have investment property worth $600K with $200K loan

Equity available: $400K

Need to pay ex-partner: $150K settlement

Refinance to $350K, release $150K cash for settlement

Challenges After Separation

Understand the lending hurdles you may face - and how to overcome them.

⚠️

Reduced Income / Single Income

You were previously assessed on dual income. Now lenders only consider your solo income, reducing borrowing capacity by 40-60%.

Solutions:

  • Child support income: If receiving court-ordered child support for 6-12+ months, most lenders will count 100% of it
  • Spousal maintenance: Ongoing maintenance payments count as income if legally documented for 3+ years
  • Return to work: If you took time off for children, evidence of return to workforce (contract, offer letter)
  • Use guarantor: Parent or family member guarantees loan to boost serviceability
  • Choose smaller property: Downsize from family home to more affordable property
⚠️

Existing Joint Debts & Liabilities

You're still jointly liable for old credit cards, car loans, or joint mortgage even if your ex agreed to pay them.

Solutions:

  • Pay out joint debts: Use settlement funds to close all joint accounts
  • Transfer to ex's name: If they're keeping the car, get car loan transferred to their name only
  • Court orders help: Lenders give weight to court orders specifying who pays what debt
  • 12 months payment history: If ex is paying the joint debt, 12 months of clean payment history helps
  • Debt consolidation: Roll small debts into new loan to simplify
⚠️

Credit History Issues

Your ex missed payments on joint accounts during separation, damaging your credit score. Or you have defaults from the difficult period.

Solutions:

  • Check credit report: Get free report from Equifax/Experian, identify issues
  • Explain circumstances: Letter explaining late payments were during separation, not your normal behavior
  • Show recovery: 6-12 months of clean payment history post-separation demonstrates reliability
  • Specialist lenders: Some lenders are more understanding of separation-related credit issues
  • Wait if needed: Serious defaults may require 12-24 months to clear before approval
⚠️

Insufficient Deposit / Savings

Your settlement is tied up in property or super. You don't have cash deposit for a new purchase.

Solutions:

  • Sale of existing property first: Sell joint property, take your share as deposit
  • Gift from family: Parents can gift deposit funds with statutory declaration
  • Guarantor loan: Parent guarantees using their property equity, you need minimal deposit
  • First Home Guarantee: If never owned property in your name, may qualify for 5% deposit government scheme
  • Equity from other property: If you kept investment property, use its equity

Required Documentation

Gather these documents to speed up your application and improve approval chances.

Standard Loan Documents

  • ID (license + passport/Medicare)
  • 3 months payslips
  • Last 2 years tax returns (if self-employed)
  • 3-6 months bank statements
  • Current loan statements (if refinancing)
  • Credit card statements

Separation-Specific Documents

  • Separation certificate or statutory declaration
  • Court orders (if finalized)
  • Binding financial agreement
  • Property valuation (for buyout scenarios)
  • Settlement statement (if property sold)
  • Child support documents (if receiving)

Supporting Documents

  • Proof of child support payments (6-12 months bank deposits)
  • Spousal maintenance agreement
  • Letter from family law solicitor
  • Explanation of credit issues (if applicable)
  • Evidence of debt payments by ex (if claiming)
  • Gift letter from parents (if using gifted deposit)

Frequently Asked Questions

Can I apply for a loan before divorce is finalized?

Yes, you can apply once you're separated (even before divorce). Lenders require evidence of separation - typically 12 months separation certificate or family law documents showing proceedings commenced. You don't need to wait for final divorce decree. However, your borrowing capacity is assessed on your solo income only, and lenders will want to see that property settlement is underway (either agreed or in negotiation).

Will lenders count child support as income?

Yes, most lenders count 100% of court-ordered child support if you've been receiving it consistently for 6-12+ months. You'll need to provide: (1) Court order or child support agreement, (2) Bank statements showing regular deposits for 6-12 months, (3) Evidence it will continue for 3+ years. Private arrangements (not through CSA) are harder - some lenders won't accept them, others may accept 50-80% with strong documentation.

My ex won't cooperate with refinancing. What can I do?

This is challenging. If you have court orders requiring them to cooperate, take those to your solicitor - they can be compelled to sign. If settlement is agreed but not formalized, get it documented ASAP through consent orders. If they're genuinely refusing and you're both on the mortgage, your options are: (1) Apply to court for orders compelling cooperation, (2) Sell the property (you can apply to court for sale), (3) Continue paying the joint mortgage and revisit later. Don't stop paying the joint mortgage - it will damage both credit scores.

Can I get a home loan if I have to pay child support?

Yes, but child support payments reduce your borrowing capacity. Lenders subtract your child support obligation from your income before calculating serviceability. For example, if you earn $100K and pay $20K/year child support, lenders assess you on $80K. This is why the parent receiving child support can often borrow more than the parent paying it (they get $80K income + $20K child support = $100K assessable vs $80K for the payer).

How long after separation can I apply?

You can apply immediately after separation, but timing affects approval. Best to wait until: (1) Property settlement is agreed (even if not finalized), (2) You have clear separation documentation, (3) Any credit issues during separation have been resolved (6-12 months clean), (4) You have stable income (if you changed jobs due to separation, 3-6 months in new role helps). If buying out ex-partner, you can sometimes start the loan process before settlement is finalized, then settle the loan when court orders are made.

Do I qualify for first home buyer benefits after divorce?

Possibly! If the family home was in your ex-partner's name only (or jointly but you're transferring your share to them), you may have never owned property in your individual name. This can make you eligible for First Home Guarantee (5% deposit), stamp duty concessions, and grants - even if you lived in the family home for years. Each state has different rules. Speak to a broker to check your eligibility - this could save you $20K-$40K in stamp duty and LMI.

💡 Why Use a Broker for Separation Finance

Divorce and separation lending is complex. Not all lenders handle it the same way. A specialist broker can:

✓ Match you to the right lender: Some lenders are more flexible with child support income, others with credit issues from separation, others with single income scenarios.

✓ Navigate complex documentation: We know exactly what lenders need for property settlements, court orders, child support verification, etc.

✓ Handle confidentially: We understand this is sensitive. All conversations are private and judgment-free.

✓ Time-critical scenarios: If you need to settle quickly (court deadlines, settlement dates), we can fast-track.

✓ Maximize borrowing capacity: We present your application to show strongest possible serviceability given your circumstances.

Get Confidential, Judgment-Free Advice

We understand this is a difficult time. Our specialist brokers handle separation and divorce lending with sensitivity and professionalism. All conversations are strictly confidential.

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Related Resources

👨‍👩‍👧 Single Parent Loans 🤝 Guarantor Loans 🔄 Refinancing Guide 🏠 First Home Buyer 📊 Loan Calculators