Going through a divorce is difficult, especially when there are several financial commitments to sought through.
Many people get caught up in the emotional side of a divorce, which can cause them to make serious financial mistakes which can damage a person’s financial situation for both the short and long term. See what financial mistakes you should try to avoid:
Forget to make repayments
This is a mistake that can cause problems for you down the track. It is important that throughout the divorce process, regular repayments are being made on all jointly owned debt. Even if you are not on amicable terms with your partner, not meeting repayments could result in a default on your credit report, which could affect your chances of getting a home loan in the future. When a lender looks at your report, they will not see a divorce as an acceptable excuse for not meeting repayments.
Not considering long term financial security
Even though you may want to finalise the divorce as soon as possible, if you only focus on the immediate task of splitting assets and finances without considering the long term consequences, you are not doing yourself any favours.
Before signing any proposed settlement agreement, have a financial planner look over the agreement and advise you on any long term financial consequences.
Being unrealistic about investment returns
It is important to be cautious when splitting assets and investments. You need to consider the investment’s potential growth over the next few decades and it’s best to do this by getting a professional’s opinion. Even if a certain investment (for example, a property) has seen steady growth over the past few years, it doesn’t necessarily mean it will continue to grow at a steady pace. Think twice before accepting investments that you may not have as much knowledge about over safer asset options (such as cash).
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan
Anouska Linz is Manager, Online Sales at State Custodians and has over 10 years’ experience in financial services, both in broking and banking. Holding a bachelors degree in accounting, Anouska quickly discovered a love for mortgage lending and assisting people to achieve their home ownership goals. She leads a team of highly experienced lending specialists who are passionate about finding lending solutions which result in real wins for the customer. She is also a massive netball fan.
For more information on our home loans, visit www.statecustodians.com.au or call 13 72 62.