Latest News

Latest News

What Does Divorce Mean for My Mortgage?

11th July 2017

According to the most recent statistics, the number of divorces in the UK has been decreasing since 2003. In 2015, there were 101,055 divorces, a 9.1% decrease compared with 2014, and a decline of 34% from a recent peak in 2003.

Aside from the emotional trauma, divorce can wreak havoc on your finances. With a property mortgage being one of the most common shared investments, handling yours correctly through the divorce process will enable both parties to separate with as strong a financial footing as possible.

 

The first steps

If you have changed your circumstances in the shape of a divorce, your first port of call should be to contact your financial advisor. This is particularly pertinent if you think you might struggle to meet your monthly repayment commitments.

Most lenders are likely to be sympathetic to this, and will give you some additional breathing space in the form of a so-called “payment holiday”.


Your options

Once you have this secured, you have three options:

1. Both parties agree to sell the property and move out: this requires that the mortgage is paid off from the proceeds of the sale, and what is left is shared between the parties.
2. The mortgage is transferred into one name: this means that one of the parties will buy the other out of the mortgage, including any equity. In this circumstance, the remaining party will need to be able to prove to their lender that they are capable of paying the full monthly amount. This includes their ex-spouse’s share of the equity. If they are unable to do this then the lender will not be able to offer this option.
3. Continue to pay the existing mortgage: this is particularly viable if the mortgage is nearly paid off.

Regardless of which route you take, it is wise not to finalise the divorce until your mortgage is taken care of. If things get messy, you may need to prepare for court action to make your ex remove your name from the mortgage through selling or refinancing.

 

Following your divorce

While lenders no longer offer 100% loan-to-value Divorce Mortgage Programmes without a guarantor, there are specialist divorce mortgages that include similar benefits, as well as relaxed initial rates to provide breathing space.

To prevent emotions taking control of you and your ex-spouse’s behaviour, we recommend seeking independent financial advice. Our experts have access to over 5,000 mortgage products giving you a wealth of options and, ultimately, relative freedom in a challenging time in you and your ex-partner’s life.

To see how our experts can help, call IMC today on 020 3553 9340 or email us at info@imcfs.co.uk.

Return to news page

Who we are

It’s important to us that you get to know who is looking out for your financial future. Meet our team and discover our experience and see why we are perfectly placed to provide you financial advice.

Find out more about us

Subscribe to IMC's Newsletter here

Gold star Gold star Gold star Gold star Gold star
"A very professional service that was delivered at a constantly high-level from initial contact through to completion. Whether you're a first-time buyer or already on the property ladder I couldn't recommend them enough."

Emily Hancox , May 2016

Independent review from Google
Gold star Gold star Gold star Gold star Gold star
"Excellent honest and tailored advice from Andrew Jackson for over 16 years now."

Nicola Bennett , May 2016

Independent review from Google
Gold star Gold star Gold star Gold star Gold star
"IMC have delivered excellent advice and service to our company Red Sky Property and clients for the last 12 Years and we cannot rate them highly enough."

Brad B , April 2016

Independent review from Google