Information on mortgages and divorce

July 10, 2008 10:11 am Divorce and Finance, Mortgages

Research shows four out of ten married couples divorce. For couples this is one of the most difficult and stressful times they face, particularly if they have children.

You must keep your mortgage repayments maintained otherwise this could lead to further financial problems in the future. So it’s very important to let your mortgage lender know you are going through a divorce most will be sympathetic and will help to sort financial matters out.

You need to decide what should happen to the property as soon as possible, usually married couples are on joint mortgages so they both equally own half of the property, one party can buy the others share affectively buying the other out. It would be a good idea to check with your Mortgage Company or Financial Adviser how the mortgage is set up, some people are unaware of the different types of ownerships, and it is also advisable to seek advice when purchasing any property jointly whether business or personal.

You need to decide as to what should happen to the property as soon as possible. A married couple usually jointly own a property as a whole so in the event of separation or divorce, they each have the right to claim a share of the home. If one person wants to remain in the house they bought together, they can buy their partner’s share. You will need to speak with your solicitor and Financial Adviser who will discuss the different options that are available to you.

The first step is to get a valuation. The buyer would then pay their former partner half the value of the deposit, plus half the increase in the value of the house. The remaining partner will then cover the mortgage on their own. There are various options on offer. The partner could be paid what they are owed by increasing the mortgage rather than using savings.

Ask your financial adviser about the specialised mortgages which treat maintenance payments as normal income. An increasing number of mortgage lenders will now take these payments as normal income, for some women this could be extremely important – this can not only be done by court order but also by private agreement.

Child & working tax credits and secondary incomes can also be considered when calculating affordability for a mortgage. Check out what Building societies and banks are launching schemes aimed specifically at divorcing couples. If you would like us to help you to find the best deal available for you or for help and advice, please complete our Mortgage Enquiry Forms one of our experts will contact you.