What to consider when purchasing a property post-divorce

Divorce can be a transformative time, not just emotionally but also financially. When it comes to purchasing a new property after a divorce, you should approach the process with a clear understanding of your current financial position and how to best manage your wealth going forward. Whether you’re securing a home for yourself or investing in a property, thoughtful planning is important to help set you up for success in your future.

Have a clear picture of your finances

The first step in buying a property post-divorce is to assess where you stand financially. The division of assets can be a complex process, so it’s important to fully understand the value of everything you’ve received in your settlement – whether that’s the family home, investments, or pensions.

At this stage, it’s also key to factor in any ongoing financial commitments, such as child or spousal support. These will impact your ability to take on a mortgage or secure a loan, so having a comprehensive view of your cash flow and financial obligations will enable you to make informed decisions.

Consider a Lombard loan

If you have significant assets, you might want to explore a Lombard loan as an option to finance your property purchase. These loans allow you to borrow against your existing investments – like stocks or bonds – without needing to sell them. This way you can unlock the value of your assets while retaining the growth potential of your portfolio.

For those with substantial wealth, Lombard loans can be an appealing alternative to traditional mortgage financing. The interest rates tend to be competitive, and the loan can offer more flexibility. This could be especially useful if you don’t have a large cash deposit available or want to avoid selling valuable investments.

It’s important to note, though, that Lombard loans do come with risks. If the value of your assets drops, you may need to provide additional collateral. For this reason, it’s important to manage the loan with care to stay on top of market conditions.

What about the family home?

If you’re thinking about whether to sell your family home or hold onto it after your divorce, this is a significant decision and one that deserves careful consideration. For some, staying in the family home may offer emotional stability, particularly if children are involved. However, it’s not always financially feasible and you should take time to consider whether you can afford the ongoing maintenance and mortgage costs.

If selling the home is on the cards, timing becomes crucial. You’ll likely need to balance the sale with finding your next home, or consider renting for a short period. It’s always best to have a plan in place before taking any action.

How a wealth planner can support you

The property market can be complex and overwhelming, particularly after a divorce, which is why it’s important to have the right guidance and support. A wealth planner can work with you to develop a plan that not only meets your immediate needs, but also secures your long-term goals, giving you a clear vision of what your financial future looks like.

By taking a holistic approach, they can help you evaluate which options works best for you, whether that takes the form of a Lombard loan or if an alternative route, such as selling certain assets for example, would be better. Your wealth planner will also keep you informed on property market trends and offer valuable insights into financing options, so you can make choices that align with both your short and long-term goals.

A brighter future

Purchasing a property after a divorce doesn’t need to be too daunting. By understanding your financial position and exploring all your financing options you can make the right choice for your future. Working closely with a wealth planner will ensure you make informed decisions that align with your broader financial goals, whether that’s securing your dream home or investing wisely for the future.

If you’re at this crossroads and unsure of your next step, don’t hesitate to contact your private banker. We’re here to guide you, offering expertise and support to help you adapt to your next chapter with confidence.

Learn more about how we can help you navigate this complex stage of your life here.