Separation/Divorce + Home Ownership

Ending a relationship is a challenging experience - not only emotionally, but often financially. It’s not uncommon for couples who’ve co-owned a homes to sell up, which poses a daunting question: if you’ve always had a joint income, can you afford a mortgage on your own income, or will you have to rent?

Many of our clients are people who’ve gone through this situation - we’re happy to help you answer this question, and give you a financial road map to your new future.

Financial Planning for a Single Income Mortgage

In my role as a mortgage broker and financial advisor, I often work with clients to evaluate their household budgets and determine whether they meet the affordability criteria of lenders. Here’s how we can help:

• Bare Bones Budget: We start by looking at a ‘bare bones’ budget to identify your essential day-to-day expenses, including food, power, internet, transport, communications, insurances, retirement savings, school fees, kids' expenses, and entertainment.

• Accommodation Expenses: Once we have a clear picture of your essential expenses, we can determine what’s left over each month. This helps us understand how much you might be able to borrow for a mortgage (and what you can afford).

• Borrowing Power: Knowing how much you can borrow on your own income is a crucial step in determining your mortgage options post-separation. Once we know how much you can borrow, we can then figure out what deposit you can muster from the sale of the existing family home. Additionally, we can explore whether you can use your KiwiSaver (and/or other Kāinga Ora products) to help you get into your new home.

• Suburb Suitability: House prices vary widely suburb to suburb (especially here in Tauranga!). Your borrowing ability and budget will help determine which suburbs you can afford to purchase in. We know this consideration is vital, especially when thinking about school zones for kids and other amenities.

Comprehensive Financial Advice

Separation involves more than just finding a new place to live; it requires comprehensive financial planning. We provide additional financial advice as part of our mortgage broker services to help you feel confident that you’re making the best decisions for your family and your future.

This could include reviewing your insurance policies (health, life, and home) to ensure they still meet your needs post-separation, exploring the various support options that exist (KiwiSaver, Kāinga Ora products, and other financial support mechanisms available to you), and thinking about your long-term financial goals (saving for children's education, retirement planning etc) and how your new situation affects these plans.

Navigating a mortgage and other financial aspects of a relationship breakup can be overwhelming, but you don't have to do it alone. Contact us for financial advice and support to find a new home that meets your needs and your budget.

Our blog is not intended to be taken as personal advice and is for informational purposes only.
Before acting on this information, contact our mortgage broker to ensure it is suitable for your circumstances.