Financing Your Future After Separation
In a property settlement, it’s important for separating individuals to be clear about how they want to divide their assets.
When it comes to property, the options usually include:
Selling your share of a property to your ex
Selling a property outright
Taking over full ownership of a property
If you plan to take over ownership, you’ll generally need to re-finance the mortgage.
Here are three key tips to keep in mind when buying out your ex.
1. Why a Mortgage Broker Can Help
If you are considering taking ownership of a property such as the former marital home., you need consider the impact it will have on the existing arrangements that may be in place, especially if the property is subject to a mortgage in a joint name.
If both parties are on the mortgage, the remaining titleholder will need a "new" mortgage in their sole name. It is often a challenge for many individuals to take out a mortgage in their sole name. Talking to a mortgage broker (sooner rather than later) about your borrowing capacity post-separation can assist you to make informed choices, before you separate legally.
A broker can map out your borrowing capacity, including how lenders treat child support/spousal maintenance and income nuances. A broker also helps you plan around existing debts (credit cards, car loans, HECS/HELP), dependant costs, and likely valuation outcomes—all of which affect approval. At the same time, we can work with you on future goal planning in conjunction with your financial planner or accountant—whether that’s preparing for an investment purchase, budgeting for school fees, or setting up strategies to build long-term financial security post-separation.
2. Why You Need a Legal Separation Agreement Before Finance Approval
When dividing assets, it’s important to formalise your agreement legally, to give both parties certainty and protection.
The clean break principle is a concept in family law (particularly in Australia and the UK) that encourages separating couples to finalise their financial relationship as completely as possible, so neither party remains financially dependent on the other.
The idea is that, once assets and liabilities are divided, each person can move forward with financial independence and certainty, without ongoing claims or obligations (other than child support or spousal maintenance if required).
Why it Matters
Certainty & Protection: A legally finalised settlement (through Consent Orders or a Binding Financial Agreement in Australia) prevents either party from making further claims against the other’s income, assets, or estate in the future.
Financial Independence: Each person is able to plan for their own future without worrying about unexpected financial claims.
Bank & Lender Requirements: Many banks require evidence of a “clean break” (a legal separation agreement) before approving finance post-separation.
3. Why a Property Transfer Requires Conveyancing
Once your loan is approved and your settlement agreement is finalised, the next step is to arrange the property transfer so ownership is correctly updated on the property title. A conveyancer or solicitor will handle this process, which includes preparing and lodging the transfer, discharging any existing mortgage, and registering the new one.
It’s also important to understand the potential costs involved. In some states and territories, property transfers made under family law agreements—such as Family Court Orders, Consent Orders or a Binding Financial Agreement—normally qualify for stamp duty exemptions or concessions.
💡 Whether it’s finance pre-approval, your separation agreement, or conveyancing, Simple Separation can help make the process easier. Click here to book your free consultation or call 1300 308 226.