The two biggest reasons that people are cannot afford to pay their mortgage are unemployment and divorce.
Losing your job is an obvious one. If you stop getting the monthly salary that you agreed with the lender when taking out the deal then it figures you won’t be able to make repayments.
Defaulting on your home after a divorce makes sense too. If you have an acrimonious divorce then battles over money can get very tetchy indeed.
Many divorces descend very quickly into who owns the property and who put what money in when. They can get bitter and some simply stop paying the mortgage in the midst of the chaos.
But even in amicable divorces splitting up the family home can be a tricky business and how to decouple is not easy.
Firstly, your mortgage has been agreed on the basis on two incomes and lenders have – most likely - assessed your ability to pay based on two people contributing.
When that breaks then the lender is not simply in a position to allow one person to take on a mortgage that may be far bigger than their salary.
It may be a mortgage the husband may never have been able to afford on their own so it does not make sense for the lender to simply hand over the contract without thinking.
It needs a full re-application of a mortgage under one person.
Lenders are neither stupid, nor – normally – callous so they can be accommodating during divorces and be more relaxed. They also have a financial interest that they want you to keep paying the monthly mortgage.
The most important question then is – how much can you borrow?
To asses this then you need to add up your income and expenditure and speak to a mortgage broker to get the right deal for you.
There may be unique income to consider after a divorce such as child support payments, changing state benefits or investments.
There could also be changing spending patterns – you could be giving out child support payments or have to spend more on school or university fees, for example. You may have to spend more or less on a car.
All these factors will have a material impact on how much you can borrow on your ability to stay in your property and get a new mortgages.
It is then time to work how much you would like to borrow and what that means for your monthly bank balance.
Using mortgage calculators alongside advice will help you get the best deal on rates, flexibility of payments or other features that may interest you.
We know it can be difficult to deal with your finances at a time when there are emotional issues such as dealing with children or court settlements to deal with.
Renegotiating your mortgage is a complex and stressful time with lots of uncertainty so using a mortgage adviser experienced in dealing with sensitive cases can be worth its weight in gold.
