Separation is one of the hardest things a person goes through, and money is usually right in the middle of it. The mistake we see most often is people assuming that because their circumstances have changed, a home loan is simply out of reach. In a lot of cases, it is not. Here is how it actually works.
We start by explaining, not selling
When someone comes to us after a separation, the first thing we do is educate. A lot of the time, one partner has not been across the finances at all. They may not have been privy to the full financial picture, or fully understood what was happening in the background of the relationship.
So we sit down and go through it in plain language. What you owe, what you own, what your options look like, and what you can genuinely afford from here. No jargon, no pressure, just clarity at a point when most people feel like they have very little of it.
The mistake: assuming the on-paper earner holds all the cards
Here is the belief that trips people up. With a separation, the higher earner will often feel that whoever earns the income on paper is the only one who can borrow, and that the other person is stuck. That is not always true.
Lending is more flexible than most people realise, and the right structure can change the outcome completely. It is rarely as black and white as “you earn less, so you miss out.”
Income you may not realise counts
This is the part most people are surprised by. In some cases, income such as child support or maintenance payments can be used toward your borrowing capacity. Not with every lender, and not in every situation, but often enough that it is worth checking before you write off your options.
Not all hope is lost. There are frequently other forms of income and other angles we can use to help you move forward.
Your two main paths
Broadly, there are two ways we help separating clients:
- Buying a new place. We work out what you can afford on your own, budget it properly, and get you into a home of your own.
- Keeping the existing home. If you want to retain the property, we look at restructuring the existing lending so it works in one name, so the family home does not have to be sold if it does not need to be.
Which path is right depends entirely on your situation, which is exactly why a conversation early on matters so much.
A few questions we get asked
Can I get a home loan after separating or divorcing?
In many cases, yes. Your borrowing capacity depends on your income, expenses and the lender’s criteria. A broker can look at your full picture and find the lender whose policy suits your circumstances.
Can child support or maintenance count as income?
Sometimes. Certain lenders will consider child support or maintenance payments toward your borrowing, subject to conditions. It is worth checking rather than assuming it does not count.
Can I keep the family home in my name?
Often you can, by restructuring the existing loan into a single name. Whether it stacks up depends on your income and the numbers, which we can work through with you.
When should I speak to a broker?
As early as you can. Understanding your options early takes a lot of the fear out of the process and helps you make decisions from a position of knowledge rather than panic.
Talk to The Brokerage
If you are going through a separation, please do not assume the door is closed before you have had it explained to you. We work with separating and divorcing clients across Brisbane, Sydney, Melbourne and the rest of Australia, with patience and without judgement, to find a way forward.
Get in touch with The Brokerage.
General information only. This article does not take into account your personal circumstances and is not financial or credit advice. Lending criteria, interest rates and borrowing capacity vary by lender and are subject to approval. Please seek advice tailored to your situation.