What Happens to a Joint Mortgage When You Get Divorced?
Dividing a jointly owned home during a divorce or dissolution of a civil partnership can be challenging. At Connie Hewitt – Your Local Mortgage Expert, we aim to provide guidance and ease stress during this already difficult time. You can trust that we understand your situation and will strive to offer empathetic and respectful service throughout the process. We always suggest seeking legal advice before making any changes to your existing mortgage.
Inform the Mortgage Lender
One of the first steps after deciding to separate is to inform your mortgage lender. Some lenders may offer a short payment holiday for those going through divorce proceedings.
Consider Your Options
While it can be challenging to have productive conversations with your ex-partner, it’s crucial to understand your options regarding your mortgage. If direct communication is difficult, an intermediary can help facilitate these discussions.
- Both move out: Sell the property and split the proceeds of the sale.
- One partner moves out: The other stays, but the mortgage remains a joint responsibility – this may work best for a family home with children.
- Buyout: If financially possible, one partner could buy out the other and continue to live in the home.
- Partial ownership: One partner can give up ownership rights but keep a stake in the assets, which they receive when the property is sold.
Navigating Joint Mortgages During Divorce
How Connie Hewitt Can Help You Through the Transition
Managing Mortgage Challenges During a Divorce
If your name is not on the title, it doesn’t necessarily mean you have no rights regarding the property. If you’re married or in a civil partnership, you can register your matrimonial rights to the home with the Land Registry. This will mean your ex-partner cannot sell the home without your consent and cannot legally force you to leave the property.
If your partner owned the home before your partnership, you may not have the same rights to the home and should seek legal advice.
If you have a joint mortgage, you must continue to pay your share of the mortgage payments when you separate, even if you no longer live in the property.
Refusing to make mortgage payments can affect both your credit scores and will not reflect well on you during the divorce proceedings.
If one partner decides to stay in the jointly owned property, transferring the mortgage into their name is possible, but they will need to buy the other partner’s share of the property.
While most lenders will accommodate mortgage transfers, they are not obligated to do so. You will need to reach an agreement with the lender that the remaining occupant can afford the mortgage repayments on their own.
Once the mortgage has been transferred, the partner leaving will no longer be named on the mortgage. At this point, both parties should be able to make a clean break from the financial ties of the partnership on their credit files.
Essentially you need to qualify for the mortgage on your own and to do this you will need the minimum of a separation agreement to do so. Depending on the scenario, sometimes this could involve a co-signor or utilizing alternative lending. This is where using a Mortgage Broker who is familiar with the consequences of divorce & dividing assets is greatly beneficial. Dependent upon your legal agreement with your ex-partner you may need to pay him or her their share in the property, including any current equity it holds. To establish the value of their share, you will need an independent valuation of your home.
Everyone’s situation is unique, we work to customize a mortgage product that best suits you & your circumstances.
