Divorce and Mortgages
Divorce and seperation is such a stressful time and one which requires significant thought and compromise, especially as it is an incredibly emotional time, not to mention financially challenging in many cases.
Whether children are involved or not, our divorcing clients have many questions. Can I buy my partner out? Can they buy me out? Can I stop paying the mortgage? What if my partner stops paying the mortgage? Can I stay on the old mortgage and buy a new home for myself? You may be discussing options such as renting out the family home and each buying a new home. Every divorce is different.
As sympathetic independent mortgage brokers, we can help. We will listen to what you are looking to achieve and give you expert advice on what options you have available. Often, having an expert who is not involved can help both parties to a divorce.
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Divorce
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What Can Happen to a Joint Mortgage When You Divorce?
When you divorce in the UK, and you have a joint mortgage, it can be a complicated situation. Usually, one party will take over the Mortgage (transferring the property into their name). In contrast, the other party may still need to remain on the mortgage agreement until they can either pay off their share or transfer it to another person.
The process of how this is executed depends on your specific situation.
If both parties agree one will take over the Mortgage, then both must go to their lender to request a title deed transfer and for their names to be removed from the contract. If there is disagreement, then both parties can apply to the Court for a financial order to determine how any assets should be divided between them. These orders are legally binding, so all parties must comply with them.
It is also possible that both parties may decide to sell the property and use the proceeds to pay off any remaining mortgage debt. They can then split any surplus money between them as part of their legal, financial settlement following divorce proceedings.
It is essential to seek legal advice before deciding on a joint mortgage during a divorce, as each situation is unique, and factors may affect the outcome of your decisions or rights regarding the joint mortgage arrangements. A fantastic local resource from Grant Saw Solicitors is found at Grant Saw Divorce Services
Can I Stop Paying Mortgage During or After Divorce?
If the couple decides that one spouse will keep the house, then they must decide on an appropriate financial arrangement which will allow them to pay off the balance in full. Often, this may involve remortgaging the loan to take on a new mortgage with only one name.
During a divorce, emotions are likely to run high and considered thought is essential at this challenging time – easier said than done. A rash decision can now cause long-term consequences. If the Mortgage is in joint names and you stop the mortgage payment and go into arrears, this will show on both parties’ credit records. The result is that you will have challenges in getting future credit as you have had historic mortgage arrears.
A successful Divorce (if you can call it that) is about negotiation and compromise. An example is if one person does not have the income to take over the Mortgage, but the couple decide that one of them should continue to live in that property, both parties will likely remain on the Mortgage. This could cause a challenge if the person leaving the property wanted a mortgage to buy another property unless the income could service both mortgages.
Can I Transfer My Joint Mortgage to My Ex-partner?
This is the most solution, assuming it is agreeable to both parties. Transferring a mortgage after a divorce is usually a remortgage of one partner’s name. This involves filling out an ‘Application to Transfer Mortgage’ form that is signed off by both parties involved.
Both divorcing parties should get independent legal advice and protect their interests throughout any transfer process.
Many families have substantial property values in excess of £1m and we can cater to this market too.
Can I Buy Out My Ex-partner?
Again, if agreeable to both of you, then this is fine. It comes down, again, to the question if you can secure a mortgage in your own right? Please take legal advice before you do anything, it doesn’t have to get messy, but both of you will want what’s fair, we suspect.
My Separation Is a Complete Mess and We Cannot Agree on Anything. What Can I Do?
Sadly, this is a common occurrence currently. Firstly, please agree on one thing: to keep up your Mortgage and other loans/debt repayments to ensure your credit remains intact. You may wish to speak to the lender and request to convert to an interest-only Mortgage in the short term while you iron out the situation and come to an acceptable agreement.
Have you considered mediation? It might be a perfect first step. For a local mediator, you can check out this link – www.familymediationcouncil.org.uk/find-local-mediator/ – if, after mediation, you cannot agree, then it is likely to end up in the hands of the Lawyers, and this will get expensive.
How to Get a Mortgage After Divorce?
Getting a Mortgage after a divorce can be complicated but achievable. It is essential to start by contacting an experienced mortgage advisor who can assess your circumstances and review any existing financial commitments that may have changed following the Divorce.
Once you have established the maximum amount you can borrow, it is essential to research which lenders are most likely to accept applications from those in your situation and compare the different features of each loan product.
Consult a solicitor to ensure all relevant financial documents are up-to-date and accurately reflect your post-divorce financial status.
How Can We Help with Divorce Mortgage?
Securing a mortgage during or after a time of Divorce be complicated and emotionally charged, but our Conran Mortgages team can take the stress away. We have seen it all and, at times, felt like mediators (including self-build divorcing couples!)! But we love to help and add value to people’s lives despite their challenging times.
As Independent Mortgage experts, we have the Whole of Market experience and are fee-free mortgage brokers.
Our experience will demonstrate that we know what we are talking about and will guide you to the best Mortgage the market has to offer.
We sympathise with the challenging time you have been through and will expertly work with you to ensure a seamless transaction resulting in home ownership and future happiness. You can make a confidential enquiry here