Going through divorce is emotionally and financially draining, but rest assured, some lenders will accept child support payments as income if you decide to refinance your home loan
Divorcing a partner is a difficult and stressful time as you are knee-deep in court proceedings, paperwork and legal appointments.
If you’ve decided to refinance your home loan post a divorce settlement, the good news is that some lenders will still accept your application given that you receive child support benefits as a main source of income.
Find out which benefits are generally accepted and what documentation you’ll need to provide to make the application process as smooth as possible.
If you’re thinking of refinancing with another lender, you can read our refinancing after divorce guide.
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Which benefits are accepted?
Family Tax Benefits
Family Tax Benefits (FTB) Part A and Part B and child support income are accepted by a number of lenders. However, keep in mind that some lenders view child support payments as an unreliable source of income so they may not take this into consideration when reviewing your borrowing capacity.
The lender will consider the following:
- Age of dependents. Most lenders will take into account the age and number of dependents that you have before deciding whether or not this is an acceptable form of income for the loan. The older your children, the less likely the lender will accept your Family Tax Benefit (FTB) income, particularly children aged 11 years and over.
- Centrelink statements. The lender will request at least 6 months of Centrelink statements. You can download a statement from the Department of Human Services website.
Child support payments
Some Australian lenders will accept child support payments when assessing your income for a home loan application.
When speaking to your mortgage broker or lender about your situation, you'll need to specify whether the child support payments are via the Child Support Agency (CSA) and whether the payments are court ordered.
You may also be required to supply the following paperwork:
- Family Court Law Order
- Bank statements showing the benefit being deposited into your account and a steady deposit history (e.g. at least 6 months)
- A letter from your solicitor
- A letter from the Child Support Agency (CSA)
Speak to a mortgage broker to find the right home loan for you
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How much can I borrow?
When determining your serviceability potential, a lender will typically review your recent Centrelink statements to work out your annual gross income. Although they will treat your application on a case-by-case basis, ultimately they will review your financial situation to decide whether the support benefit is sufficient to repay the loan.
You can use our calculator below to estimate how much you can afford to borrow.