Divorce Settlement - Divorce Mortgages
Divorce Settlement or Divorce Mortgages
As part of a divorce settlement it may be agreed that one of the parties will keep the matrimonial home and will either buy out or transfer the other parties share as part of the mediation, agreement or Court order.
Capital Fortune are divorce mortgage specialists and any application for finance will be overseen by one of our specialist advisers, Rob Killeen who practised as a London family law barrister for 8 years. Rob re-trained as a Financial Adviser in 2005 and has focused specifically in Mortgage Advice and Protection specifically for divorcing couples. Rob enjoys the unique position of being the only Mortgage Adviser in the UK who is regulated by both the Financial Conduct Authority for mortgage advice whilst still being authorised and regulated by the Bar Council to undertake family law advocacy.
Whilst no legal advice can be provided to you when taking out a divorce mortgage, due to conflicts of interest, (we prefer to leave that to your solicitors), the use of a Mortgage Adviser with ancillary relief experience will become self evident. A detailed knowledge of what income a lender will accept and/or what mortgage documentation will assist the Family Courts to determine an application for ancillary relief will prove helpful.
Divorce Mortgages - How much can I borrow?
Usually, the most important issue for a divorcing party is - How much can I borrow?
Whilst this question may seem straight forward, it should really be divided into two aspectss. Firstly, following divorce, am I able to borrow in my own right? And if so, and only then, ask secondly, how much can I borrow?
In order to answer whether you can borrow funds in your own right following your divorce, we will take you through a detailed fact find and ascertain your full needs and circumstances. This will involve obtaining details of who will be the resident parent and whether any Court maintenance orders will be made in your favour or against you.
We will then be able to confirm whether you can borrow and how much you can borrow over the telephone, at your home, work or even your solicitors' office.
We will be able to guide you as to how much you can borrow and importantly ensure that it remains affordable. How much to borrow is therefore an important question and is predominantly based on your disposable income following divorce and your projected expenditure.
Our mortgage repayment calculator will allow you to answer the question how much I can borrow? It will determine your overall level of disposable income and can then subtract your potential outgoings following divorce.
It is extremely important to determine from the outset that you will be able to keep up your mortgage repayments both now and for the full term of the mortgage.
As part of the mortgage process we will therefore take you fully through an income and expenditure analysis to determine how much you can borrow. We will also ensure that based on your individual needs and circumstances, that the proposed level of borrowing is right for you.
Income considerations on divorce
Mortgage lenders must lend responsibly and whilst we are independent, Capital Fortune fully supports them in this. Neither you, us, nor the mortgage lender wants to agree a mortgage loan which becomes unaffordable in the future. On all mortgage documentation there is a stark warning that failure to keep up on your mortgage may lead to repossession and there is no point taking on such a significant commitment if it cannot be met. The effects can be devastating.
In order to assess how much you can borrow, we will take into account not only how much income you will have coming in, but also how that income is made up. For example, if your income is based on a Court order, child tax credits, child support payments, state benefits or part / full time work this income may not be guaranteed for the future. We will therefore need to ascertain, what portion of it can be calculated when looking at how much you can borrow. Another good source of mortgage borrowing calculators can be found at the Money Advice Service.
Expenditure considerations on divorce
Once we have calculated how much your income is, we will then look at how much your monthly expenditure is likely to be following divorce. We will look at your future financial commitments such as credit cards and loans but also, we will look at general household expenses such as gas, heat and light, telephone bills, satellite and TV, travel costs and even your general entertainment and social costs.
Our Capital Fortune budget planner will take you through the costs of your monthly grocery bills, the costs of children attending school, the cost of contact arrangements, how much you spend on clothes for the family and even the cost of your own entertainment.
These factors, whilst they may seem unimportant are all fundamental is assisting you to answer the question of how much to borrow. We will calculate your disposable income and more importantly, how much is left over at the end of the month to service you new housing needs.
Once we have determined how much you can borrow, we will use our mortgage calculator to see how much you will have to repay each month at the different rates offered by lenders. We also recommend, calculating how much these payments would alter if rates increased by 1 or 2%. This gives you piece of mind that the mortgage would still be affordable in this scenario and will ensure that the mortgage loan is in fact affordable.
In the event that your Legal team or Court require documentation for legal proceedings, we are happy to provide this information as part of our ongoing service.
For more information on Divorce Mortgages, contact us today on 020 77 100 400