Mortgage and Divorce
Leanne Dewey, one of our expert mortgage advisers, explains everything you need to know about mortgages and divorce.
0:44 – Dealing with A Mortgage After Divorce
1:02 – Can You Get Divorced If You Have A Joint Mortgage?
1:27 – Who Pays A Joint Mortgage After A Separation?
1:41 – Moving Out and Selling Your Home After Divorce
2:04 – Keeping the Property
2:17 – Transferring Ownership
2:35 – Buying Out Your Ex-Partner
3:54 – Getting Another Mortgage After A Divorce
4:13 – Can I Be Named On 2 Mortgages?
4:29 – Removing Your Name from A Mortgage or Deed
4:45 – Can I Use Child Maintenance When Applying for A New Mortgage?
5:04 – Mortgage and Separation FAQs
5:18 – Is Everything Split 50:50 In A Divorce or Separation?
5:35 – Do Both Owners Have to Agree to Sell A Home?
5:56 – What If the Other Party Is Not Able to Agree to Sell the Home?
6:11 – Can I Change Our Mortgage to My Sole Name?
6:33 – Can My Name Be Taken Off the Mortgage Without My Permission?
7:00 - Summary
A divorce is something most people don't expect to go through there are solutions though and we'll walk you through your options in this guide.
Divorce is one of the most stressful reasons for changing your mortgage arrangements, it's a very personal process that usually involves the redistribution of assets and income, and it can turn out rather expensive. You should look carefully at your mortgage arrangements available and consider all your options.
- Dealing with a mortgage after divorce
Over 100 thousand people got divorced in England and Wales in 2017 yet many people don't actually know what happens to their mortgage after they separate. Let's discuss some of the main options and frequently asked questions on mortgages and divorce.
- Can you get divorced if you have a joint mortgage?
Divorcing your spouse when you have an outstanding mortgage together isn't an easy process, but it is possible and it happens every day, there are two possible routes you can take, you can either sell the property to pay off the mortgage and both move out to alternative accommodation or transfer the mortgage into one partner's name as long as they can afford to take on the repayments.
- Who pays a joint mortgage after a separation?
When a couple takes out of joint mortgage on the property, both are liable for the repayments until the house has paid off or one of them is removed from the mortgage this is true regardless of whether you're living in the property.
- Moving out and selling your home after divorce
Often a spouse will move out of the family home during divorce proceedings but that doesn't mean they surrender ownership rights. Most people go on to sell their home after their divorce settlement is complete, rather than before so it makes sense that some would have to move out before the sale.
- Keeping the property
One person may decide to keep the property once the divorce has settled to do this ownership of the property needs to be transferred into that person's name.
- Transferring ownership
A licensed conveyancer will help you complete the transfer of equity, but it is important that your mortgage lender agrees. For the lender to agree the new sale, owner will need to prove that they can afford the mortgage repayments after the separation is finalized.
- Buying out your ex-partner
There are a few different ways you can attempt to buy up your ex-partner and take full ownership of the old family home, let's have a look at some of the options.
1. Reach an amicable settlement
You could try to reach an agreement whereby you pay them a lump sum based on the show of the property they have and once the payment is made, they can immediately be removed from the title deeds.
2. Remortgage in your name only
If you're considering remortgaging in your name only your lender will need to ensure that you can afford the monthly repayments on your income alone, as soon as the mortgage is complete, the person relieving will receive the money for their share and their name will be removed from the title deed.
3. Seek a guarantor mortgage
Some lenders will agree to lend you money providing that a guarantor agrees to make the real mortgage repayments if you're unable to. Guarantor mortgages are relatively uncommon but could be a good option if you can't meet your mortgage payments alone.
4. Take out a joint borrower sole proprietor mortgage
A joint for sole proprietor mortgages are more common than guarantor mortgages and can sometimes be a lot more suitable alternative, adjoining for a sole proprietor mortgage where two people take out a mortgage and are all considered for mortgage applicants but they're not all on the total deeds of the property.
- Getting another mortgage after a divorce
Getting another mortgage after a divorce can sometimes be hard if you're still on the joint mortgage of your old family home, some lenders will instantly refuse your mortgage application if you're already connected to another mortgage, so speaking to a qualified mortgage broker can be useful.
- Can I be named on 2 mortgages?
It is possible to have two residential mortgages, but this is often the maximum accepted by UK lenders you'll need to demonstrate to the lender on the second mortgage that you can afford to pay both mortgages.
- Removing your name from a mortgage or deed
To remove your name from the title deed you must send an AP one form and a signed transfer deep to the HM Land Registry if there's still a mortgage on the property you will need the lenders permission for the removal to be accepted.
- Can I use child maintenance when applying for a new mortgage?
Some lenders might be able to incorporate child maintenance payments into overall income calculations, often they'll want to see that the maintenance is paid by a court order by the child maintenance service and has more than 5 years to run.
- Mortgage and separation FAQs
Understanding your mortgage options during or following a divorce or separation can be tricky let's go through some of the frequently asked questions.
- Is everything split 50:50 in a divorce or separation?
In short, the answer is no but this may be the starting point, but course can change the ratio if they deem a fair and reasonable to do, so this could be for childcare purposes, economic reasons or the current and potential earning capacity of each partner.
- Do both owners have to agree to sell a home?
If one of you wants to sell your jointly owned property but the other doesn't then the person that wants to sell can undertake a division and serve in court. The other party can then appeal to the court and divide the proceeds, or they can choose to buy the property and its market value.
- What if the other party is not able to agree to sell the home?
When a deficient and sellers’ action the court is able to sanction the sale if the other partner is unable to accept for medical reasons or if the other partner can't be located.
- Can I change our mortgage to my sole name?
Moving a joint mortgage to a sole name mortgage is known as a transfer of equity this transfers one of the partners rights and obligations as the property and mortgage owner to the other and if you, your ex-partner and your mortgage lender agree then you can apply for a remortgage and transfer of equity.
- Can my name be taken off the mortgage without my permission?
No, your name can't be taken off the mortgage without your permission if the mortgage and property are in joint names, your signature is required to remove you from the mortgage. Even if you agree your mortgage lender won't permit it unless your partner meets their standard lending criteria, I can't afford the monthly mortgage payments based on their sole salary.
So that was our guide on how to force and separation affects your mortgage, thank you so much for checking out our video and if you want to watch more videos like this, then please subscribe and turn on your post notifications that way you'll be notified at the next post and be sure to follow @John Charcol on social media to keep up on all of the latest JC news, see you next time, bye.