Beaking up can be hard pill to swallow
Q My partner and I are separating. I want to buy out his share of the family home, to provide stability for our two young children, but I am not sure if I can afford to take on the mortgage by myself. We bought the house 10 years ago without using KiwiSaver. Both our names are on the title. I have $62,000 in my KiwiSaver. Can I make a First Home Withdrawal?
A No, because you already own a half share of your property you are not eligible for a First Home Withdrawal. The rules are quite clear on this. To be eligible, the member must be buying their first home, or land on which to build their first home in New Zealand.
Other rules include that they need to be a KiwiSaver member for at least three years, have never owned a house or land before, and plan to live in the property as their main place of residence. There is an option for ‘second chance’ buyers, but to be eligible they too should not own or have an interest in property.
Separation is often very stressful and challenging, especially when children are involved. It is very important that you get advice from knowledgeable and qualified sources, if you have not done so already. Legal advice is crucial. If money is tight (and it often is in this situation) you can start by getting free help from local organisations. Allow enough time for each appointment and try to go at a time when your children are being looked after by someone else, so you can be fully engaged in the process.
Community Law is a free service offering help to individuals from Taitokerau in the north to Invercargill in the south. They believe that everyone has the right to high-quality legal help. They won’t give legal advice on property but they can help with family matters and housing issues. They will point you in the right direction for further legal advice in respect of your separation. Citizens Advice Bureau can also help with many of the issues you will be facing.
You may find a mortgage broker very helpful in your situation. They have broad experience in helping home buyers and they will know what your borrowing limit is. Banks’ lending policies change depending on the availability of money, Reserve Bank restrictions and a whole range of economic circumstances.
A financial mentor at your local budget advisory service can help you with any cashflow problems and give advice on debt and dealing with creditors. They will be able to identify any benefit entitlements and help you to set and achieve your financial goals.
Separation often has a negative impact on wealth that has been built up and it affects your plans for the future as well. If your partner has been the main decision maker where finances are concerned, this is a good time to get up to speed yourself. If you go to the Sorted website and find the page entitled Separation, you will find much helpful information there.
Shelley Hanna is a financial adviser with Peak Portfolio Management Ltd which holds a licence FSP702451 issued by the Financial Markets Authority to provide financial advice services. Disclosure information is available at peak.net.nz or call 06 8703838. The information provided in this article is of a general nature and should not be relied on as a recommendation to invest in a financial product. Send your KiwiSaver questions to shelley. hanna@peak.net.nz