Divorce Mortgage

Divorce Mortgage

Dealing with divorce and a mortgage are two of the most stressful things in life. Believe me I know! This page should answer many of your questions related to your mortgage options when separating from your partner.

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Divorce mortgage advice

Although I’ve arranged thousands of mortgages over the last 30 years, thankfully I’ve only had to arrange one divorce. However, I have helped hundreds of couples and individuals who are getting divorced or separating and the common theme is that people don’t realise how many options they have. This is where professional mortgage advice can help people save thousands of pounds and move on from divorce with minimal impact to their finances and life styles.

Can I get a new mortgage before my divorce?

Yes. You can apply for a new mortgage and buy a new home before the divorce is final.

What if my name is already on the marital home & mortgage?

You can be on two mortgages at once, so long as you can afford it.

If you are still on a mortgage with your ex-partner and you want to buy a new home with a mortgage, a lender will consider this a second home. They will want to check that you could afford to pay both mortgages if you had to. This being said, what you can borrow may be lower than if you had come off the marital home’s mortgage already.

Some lenders will lend you a lot more than others in this situation so it is important that we approach the correct one.

Getting your ex-partner off your mortgage after a divorce

In order to take your ex-partner off the mortgage during a divorce or seperation you will need to show to your lender that you can afford the mortgage independently. They may then agree to a transfer of equity so you own the home independently and your ex-partner is removed from the mortgage and the deeds.

What if my lender does not agree?

If your existing lender does not agree to you taking on the mortgage by yourself you may be able to remortgage to a lender that will allow this.

This may be possible as different lenders allow you to borrow different amounts. The variances can be enormous.

Can I add my new partner to the mortgage before my divorce?

Yes, so long as together you can afford the mortgage and the lender is satisfied that this is the case. You could do this by creating a transfer of equity from your ex to your new partner by buying out your ex-partner, and if necessary remortgaging at the same time.

Could ex-partner take on the mortgage during a divorce?

Yes. You may be able to have your name removed from the mortgage if your ex-partner agrees and the mortgage lender is satisfied that they can afford the mortgage. They could even add a new partner to make this affordable if needed.

Can we get divorced while we still have a joint mortgage?

Yes. People who aren’t married get mortgages all the time. You don’t need to change the mortgage to get divorced, nor do you need to get divorced to change the mortgage. A family solicitor and mortgage broker can work together to get both parties the outcome that they want.

If I receive child maintenance can this be used towards a mortgage?

Some lenders do accept child maintenance when deciding how much they will lend you. Some require it to be court ordered, some just require it to be evidenced on bank statements.

Can child benefit and tax credits be used?

Yes. Some lenders will accept this. Again, it depends on the age of your children.

Does paying child maintenance affect getting a mortgage?

Yes, it can do. If the lender sees that you are committed to paying child maintenance they will treat this like a credit agreement and may reduce what you can borrow.

If you weren’t paying maintenance but had full custody of the children this could still reduce what a bank will lend to you as they will consider the financial impact of having dependent children.

How long could I get a new mortgage for after my divorce?

Most people are surprised that even in their 50s they could still get a mortgage  to age 75 without proving their expected pension income, and beyond if you do have provable  pension income.

You are not limited to having a mortgage until your 68th birthday or your retirement age, like many people think.

Although people may take a mortgage until age 75, or beyond after their divorce, it does not mean they will have it that long. A lender may agree to a minimum term in order to keep your payment low enough that they feel it is affordable.

But I don’t want a mortgage until I’m in my 70s…

In reality people choose to overpay in order to clear their mortgage early, remortgage once they are removed off the marital home and can then make larger payments, and most commonly, when they meet somebody new, they can buy a place together, or add them to the mortgage and reduce the term substantially.

Should we stay on the standard variable rate until the divorce is final?

No. Even while you are getting a divorce, or thinking of separating you can still remortgage. The trick is to remortgage to a deal that will not charge you if you need to leave early. These deals are available without any set up fees too and are substantially cheaper than being on the standard variable rate.

I have used this strategy hundreds of times for divorcing couples to keep them off the standard variable rate, but not tied in with any fees when they sell or one party is removed from the mortgage.

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