How Could Divorce Affect Your Mortgage?
As if the emotional strain of divorce wasn’t enough, discussing financial matters is another hurdle to tackle. If you’re fortunate enough to be in agreement and amicable with your ex, then there is no reason why monetary matters can’t be ironed out quickly. However, this is rarely the case and both parties want to leave their marriage with what they believe is fair and will allow them to move on comfortably.
Many couples who seek a divorce often share a mortgage on a property. This is known as a joint mortgage and means that both your names are on the mortgage documents. This means you are both equally as responsible for the mortgage repayments on your home.
When you divorce or separate the mortgage will need to be paid as normal. If you or your ex have moved out of the family home, it is still their duty to ensure the mortgage is paid, along with yourself. A joint mortgage means you are both equally liable for the debt regardless of whether you live in the property.
If you or your ex fall behind on payments or refuse to pay, this can result in you losing your home. Both you and your ex partner’s credit ratings would be damaged and securing another mortgage in the future would be difficult.
Contact your mortgage provider
Whether you are financially comfortable enough to pay the mortgage or whether you have left the property and have zero income, let your mortgage lender know. Contact them immediately, especially if you fear falling behind on your payments. Many lenders appreciate honesty and being kept in the loop. You are their customer and they will be as empathetic as possible as long as lines of communication are kept open. When it comes to your mortgage burying your head in the sand is not an option.
Mortgage payment options
If you are struggling to pay your mortgage and your ex is refusing to help you, your lender can present you with different options for repayment. Sometimes they will allow you to make smaller payments for a period of time until you have formulated a plan of action. Another option they may offer is a mortgage payment holiday.
Your lender will send any paperwork needed to apply for a mortgage payment holiday. They will also be able to calculate what your mortgage repayments will be after this period. You should asses whether their mortgage holiday is right for you and whether you could afford the repayments once the timeframe is over.
Your mortgage options
Continue paying your mortgage
By far the best option is for both you and your ex-spouse to continue paying the mortgage. If you are on agreeable terms and can afford to do so then this is an ideal path to take. Make sure that both you and your ex are able to pay the mortgage, as well as any general living costs and ensure the needs of any children are paramount.
Transfer sole ownership
If one of you is happy to pay the mortgage and wants to remain in the home, you can transfer the property and mortgage into one name. The remaining party will need to buy the other out of their share in the family home, including their equity.
It is likely that the mortgage lender will require proof that the remaining occupant can afford the mortgage alone to grant you to become the sole mortgage and property owner.
Sell the property
Many couples, particularly those who do not have any children, often find it easiest to move out of the property and sell it. This can often give you and your ex a clean break and some sort of financial buffer to continue on with your lives following the sale of the home.
Typically, any mortgage that needs paying off will be deducted from the final sale price of the house. This remaining figure will be split between you and your ex. Who receives what portion of the cash can open a can of worms in itself. Often, trying to reach a decision or splitting 50/50 is the quickest and cheapest course of action.
Sell my house fast
If you and your ex do not have the time to spare putting your house up for sale with your local estate agent or fancy dodging further expenses, get in touch with WeBuyAnyHome today. We won’t charge you any fees and we will cover your legal costs. Furthermore, we can have your property sold in seven days if it suits you. Get a cash offer today and help take the stress and expenditure out of selling your home.
No joint mortgage
If you have read this article and feel like you have no legal rights because you are not featured on the mortgage or the deed of your home, fear no more. In the UK, the family home is considered a joint asset, regardless of who is on the paperwork, who pays the mortgage and who pays the bills. If you are married, the matrimonial home belongs to you both. The only time an issue will arise is if your ex-spouse owned the property before you were married.
If you are in any doubt as to where you stand regarding your property and divorce proceedings seek the help of a legal representative as soon as possible. When it comes to your mortgage we advise you liaise with your lender immediately.