How relationship breakdowns can cause havoc with home loans
(from the Sydney Telegraph Monday September 16th)
They’re two words that never work well together: mortgage and divorce.
The combination can leave a trail of financial destruction — almost 100,000 Australians divorce each year, often with a home loan.
And another 10,500 de facto couples are breaking up each year, social researchers say.
Managing a mortgage during and after a split is a huge challenge, but there are ways to minimise the financial pain.
The founder of financial consultancy On Your Own Two Feet, Helen Baker, said women often fared worse in breakups because of factors including the gender pay gap, a failure to seek advice and inability to borrow.
Helen Baker from On Your Own Two Feet says women often put their children first.
“Women are wired for security and they often put their children first, so they tend to take the home at the expense of any other assets to ensure the children are not disrupted,” she said.
But the bank still wants its money and the homeowner needs to protect their credit rating.
“Let the bank know what is happening immediately,” Ms Baker said.
“They have seen it many times and they know what to do. They will be able to guide you on your options.
“Sometimes you both may need to stay in the same home to meet mortgage repayments if you can’t afford another place as well.” Ms Baker said splitting couples should try to work together on making good decisions.
“Think seriously about how this house fits with your