The image shows a beautiful two-story house with a gavel superimposed on it, symbolising divorce.

Divorce – What are your mortgage options?

When going through a divorce, it is important to understand how your mortgage will be handled.

Navigating the complexities of divorce can be overwhelming, especially when it comes to handling your financial obligations. In this article, we will provide you with comprehensive information on mortgages and divorce, equipping you with the knowledge you need to make informed decisions.

Divorce is a common occurrence, with a significant number of divorce petitions being filed each year. However, many individuals are unaware of what happens to their mortgage after a divorce.

It is important to note that having a joint mortgage will not prevent you from getting divorced. However, both parties will remain responsible for making the monthly mortgage payments until a financial settlement is reached and a new arrangement is put in place. It is crucial to inform your mortgage lender about your plans for divorce as soon as possible to discuss available options for managing mortgage payments.

Your lender may be able to offer a repayment holiday or extend the mortgage term to assist with short-term payment obligations. However, it is important to consider long-term solutions such as refinancing or downsizing.

After separation, both parties are legally obligated to continue paying the joint mortgage unless a formal agreement has been made. It is essential to fulfill your mortgage payments even during the separation process. If one party refuses to contribute to the mortgage payments, it is advisable to contact your lender promptly to explore potential options.

In the event of a divorce and joint ownership of the mortgage, there are three primary options available to you:

  1. Sell your property
  2. Continue joint mortgage payments.
  3. One party buys out the other (known as ‘transfer of equity’ this option.

Selling the home after divorce is a common choice to divide the proceeds and sever financial ties. If both parties agree to sell, the property can be sold as usual. However, if there is a disagreement, court intervention may be necessary. It is important to seek appropriate financial and legal advice during the property sale process.

If you and your ex-spouse decide to keep the property within the family, you will need to transfer ownership of the property into one person’s name. This can be achieved through a transfer of equity, which allows for the removal of one party from the mortgage and title deeds. It is recommended to consult with your lender and solicitor to navigate this process smoothly.

If you are moving out of the property and wish to remove your name from the mortgage and deed, you will need to complete the necessary forms and seek permission from the lender. Your solicitor can assist you with this process.

In cases where one party wants to keep the home but the other is entitled to equity, a buyout may be necessary. This can be achieved through an amicable settlement or by refinancing the property to release equity. It is important to reach an agreement on the buyout amount and ensure that the necessary legal steps are taken to remove the ex-partner from the title deeds.

Remortgaging your home after separation can allow you to release equity and buy out your ex-spouse from the joint mortgage. This involves replacing the existing mortgage with a new one in your name or with the inclusion of a new party. Eligibility for remortgaging will depend on various criteria, including income requirements, creditworthiness, and age. It is recommended to consult with an independent mortgage broker for guidance on your remortgage options.

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Speak to a MyContractorBroker specialist on 02394 211120

#get in touch

Ready to get started ?

Speak to a MyContractorBroker specialist on 02394 211122

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