For most people living in the UK, their most valuable asset is their home, and this is no less true for couples. This is why dividing the family home if you need to divorce can be so painful financially, not least emotionally.
But it’s not unusual in Britain, with 42 per cent of UK marriages ending in divorce according to official statistics. This is why many mortgage lenders have developed products specifically designed to help separating couples manage their mortgages through divorce.
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What’s the First Step?
When you agree to divorce, the simplest thing to do is sell the family home, repay any outstanding balance on the mortgage, split the proceeds according to the settlement and start again with two separate loans. In practice, life rarely works out this way, often because of emotional attachments to a property and mostly because of children wanting to remain in the family home and within reach of existing schools.
The first step is to speak to your existing mortgage lender as they may be willing to offer you and your partner a mortgage payment holiday to get you through the divorce period. This is usually going to be contingent on you having some idea of what you both plan to do at the end of this payment holiday however.
It may be that one partner opts to sell their share to the other, which it may be possible to do through a remortgage. The income of the partner who wants to stay in the property and take on the mortgage is most relevant in this instance. Whether this is earned income or agreed payments from a former partner ordered by the court, your lender will want to know that you are able to afford the mortgage repayments each month.
This can throw up some initial concerns for newly single homeowners – two incomes will be able to afford to borrow significantly more than one income. However, there are plenty of lenders that specialise in helping borrowers who are newly divorced and will work closely with our advisers to help find the best solution for you.
If you want to take this route, you’ll need to get a solicitor to draw up a consent order signed by both partners agreeing that ownership will be transferred from both parties to just one party.
In the event that you and your ex disagree on how your finances or property should be split, it’s likely that the courts will make a financial order – separately from the legal divorce proceedings – outlining what will happen to the money and how it will be split. This can take up to 12 months, so it’s really important that you both speak to your mortgage lender as early as possible if this is the path you take.
Failing to make a mortgage payment could result in repossession of your home.
If your lender is unwilling to give you a payment holiday in the event you are struggling to meet payments, there may be other options for you. Your best bet is to speak to an independent mortgage adviser with specialist knowledge of this market and experience helping people in just your situation.
Why use a Specialist?
Mortgage brokers are specialist at finding you the right mortgage but they’re not always going to be trained to understand the complicated legal ins and outs involved in a divorce settlement. That’s where Capital Fortune stands out from the crowd.
Founding partner Rob Killeen practised as a family law barrister in London for eight years before retraining as financial adviser in 2005. His unique combination of experience has allowed him to focus specifically on helping divorcing couples to manage the transition from joint homeownership and family finances to a new and independent life.
Not only is he specialist in securing mortgage finance for clients with complicated financial circumstances, he also advises on protection insurance to help you put in place a financial safety net to protect any children or dependants you may have.
Can my Ex-Husband Sell the House Without my Consent?
If both partners own the property jointly then you’ll both have to agree to sell it. However, this isn’t always the case – some couples opt to put the family home in just one partner’s name for a variety of reasons.
In this instance, is it legal for the partner whose name is on the title deeds to sell the property without the other partner’s consent, even if they are still living there. The partner whose name isn’t on the deeds does have options to slow this down though. You can register a Notice of Home Rights with the Land Registry free of charge if you know the title number and the name the property is registered to. This means you have a legal right to remain in the property until the divorce is final and a court settlement agreed.
What if you Can’t Afford the Mortgage After Divorce?
As long as the mortgage on your home is still in both partners’ names, you are both legally liable for the repayments and failing to repay will have a detrimental effect on your credit scores. It’s not a good idea to get into this situation as even if you then opt to sell the property and buy a smaller place alone, you’ll find it tougher to get a mortgage.
If you find that your income is insufficient to afford to buy out your ex-partner and stay in the same property there are a number of options. You can sell and buy a smaller property with a smaller mortgage you can afford or, if you have a family member willing to offer support, you could apply for a guarantor mortgage.
These are fairly common, though not every lender offers guarantor loans. To qualify, your guarantor must be able to show evidence that they can afford to cover your mortgage payments in the event that you can’t.
Will Child Maintenance be Taken Into Account?
The short answer is it depends on the lender. Some will accept 100 per cent of child support payments you receive as counting towards your income for the mortgage. Others will only use part of it to work out your income for the mortgage. Some don’t include it at all while others will want to see you have been getting it consistently for the past year before they’ll take it into account when working out how much you can borrow.
If you are thinking, are in the process of or have recently been divorced and are looking for mortgage advice, speak to one of our advisers now.
Find Out Current Best Rates
|0.99%||Discount||2 years||4.99%||4.4%||2 years||£2149|
|0.99%||Discount||2 years||4.75%||4.3%||2 years||£0|
*APR = Annual Percentage Rate *ERC = Early Repayment Charge
*These figures are only illustrative. An assessment of your needs will be confirmed before a recommendation can be made. A Key Facts Illustration, which is personal to your circumstances, will be provided if a recommendation for a mortgage product is made.
In assessing your requirements, we do not use credit scoring and we can provide an accurate estimate of the amount of borrowing and the viability of your requirements, without effecting your credit score.
We avoid credit searches at the initial stages given that numerous credit searches will impact your ability to access cheap credit. It is clear that too many credit applications in a short period of time will impact your score and whilst it is important to shop around, formal applications for a mortgage can trigger rejections, as it gives the impression you may be desperate for credit. It is essential when making enquiries for any financial product, that the Company does not credit score you, until such time as you have agreed to make a formal application.
We can indicate your chances of approval prior to any application being made and where necessary, can obtain decisions in principle from lenders who do not use credit scoring.
Typically we assist customers who have a number of financial commitments and they are looking to understand how much they can borrow. A number of mortgage calculators are used on the Internet, which provide an indication of the amount of borrowing based on an income multiple. In reality, the calculation is much more complex and varies borrower to borrower and lender to lender. For example, a mortgage calculator may indicate a 4 times income multiple, but given the particular individual circumstances of the client and the lender’s chosen criteria and underwriting, the borrower may actually achieve 6 times income. In contrast, a mortgage calculator may indicate 4 times income, but due to an applicant having financial dependents, certain types of income, such as bonus or commissions, or other financial commitments, the specific lender may only allow 2.5 times income.
Clients we assist tell us from the outset, they would like a guarantee of the amount they can borrow and our knowledge of specific underwriting policies within lenders, allows us to accurately estimate, exactly what is available.
Importantly an initial discussion and agreement through us, does not impact your credit score
Capital Fortune are award winning London based mortgage brokers. We are based in the heart of London’s financial district near the Bank of England. We offer advice to first-time buyers, those moving house and to those looking to re-mortgage their existing deal to get a better mortgage rate.
We’re not tied to one lender so you can be sure we’ll get the best deal for you, from the bank or building society right for you.
We provide finance on both residential and Buy to Let property and can assist whether your looking to buy your first home, looking to re-mortgage or refinancing and restructuring your portfolio of buy-to-let properties. Our advisers are here to help.
We advise customers nationally from the Scottish Islands to the Isle of Wight and cover all the regions within the United Kingdom, including Northern Ireland.
Typically, we best assist clients with non-standard requirements and those we successfully help, generally face some sort of difficulty in the mortgage market. They seek not to be penalised for this difficulty and we look to secure them highly competitive, mainstream rates by asking our lenders to take an holistic view of their circumstances.
As expected, we offer all the usual mainstream products all standard mortgage advisers offer, but more importantly, we look to place cases of a more complex and specialist nature. This includes the self-employed, those with difficult income streams, contractors, unusual properties, foreign nationals, British ex pats abroad, overseas diplomats and those recently divorced.
We have long term relationships with nearly all the major UK lenders and have built strong trusted connections with lender underwriters at both a local and national level. Many of these key partners, prove the key to the success sometimes extending the parameters of their advertised lending criteria to assist our clients.
The promise of a rate is not the same as actually delivering a formal mortgage offer in the exact same terms. Our promise is our guarantee and many of our published independent client testimonials, confirm our ability to both deliver and help.
Alongside mortgage finance, our advisers will find you competitive life insurance, critical illness cover and income protection as well as being on hand to advise on a range of company and business insurance options.
Your Capital Fortune broker will be regularly on hand, not just through the process, but afterwards, sometimes, when you may need us most. We don’t just want you undertake the one transaction with us but seek to build a long term relationship and many of our clients have been with us for many years.
We seek to ensure the best possible results for those who choose to use us.
We totally appreciate we are not right for everyone. There are a range of other mortgage brokers in the UK but we hope that on searching through our website, viewing our published rates and transparency, that you will obtain a clear sense of how we operate and how we will look to assist you obtain the most affordable and suitable deal.
Our mortgages are here for all to see and if general information is all you need, you can search yourself here.
However, if you need the assistance of our broker team, we are here to help.
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