With this in mind, the team at www.onlinemortgageadvisor.co.uk have explained how a divorce affects your existing mortgage and have outlined all of the options available for those who find themselves in this stressful situation.
Speak to your solicitor
If you’re moving out of the home that you bought with your partner, you might be able to get your name removed from the mortgage. Before you do this though, you must ensure this won’t result in you losing out on your share of the property. Therefore, it’s important to seek advice from your solicitor in order to make sure you’re making the right choices for yourself and your finances. If your ex-partner decides to move out instead and wants their name removed from the joint mortgage, just bear in mind that this means you’ll need to keep up with the repayments on your own.
A payment holiday could provide a safety net
Banks and building societies are usually sympathetic towards couples going through a divorce because of the uncertain circumstances and upheaval that comes with it. Some might even be willing to give you a mortgage payment holiday to help ease the additional financial strain, especially if you’re struggling to keep up with the payments on your own. A welcome break can certainly help to deal with the initial separation and allow you to get back on your feet financially. Before applying for one, just make sure it’s right for you and that you’ll be able to keep up with the new mortgage repayments after the holiday ends.
Look into selling
If you’re both looking to move out of the property after you’ve divorced, you can just sell the house and pay off the mortgage that way. In most cases, selling is often the easiest and fastest way of moving on from the property after you’ve separated. If there’s any equity left after the mortgage has been paid off, this will typically be split between the two of you as it’s considered a marital asset – avoiding any disputes about the leftover money, where possible, will ensure the process is as smooth and as quick as possible for the both of you.
Continue to pay off your mortgage together
If one of you decides that you actually want to stay in the home, you could continue to pay the existing mortgage between the both of you, especially if you’ve nearly paid it off in full and have managed to maintain an amicable relationship after separating. This is more common if you have children together so that your kids don’t have to move out of their family home following the divorce. However, you might need to set up a Mesher Order through the courts first – this will state that the home cannot be sold until after a specific time or event (e.g., when the children turn 18).
Buy your partner out
Another option if one of you wants to stay living in the home is to buy the other out. Transferring the mortgage into one name will mean one of you has to buy the other’s share in the property, including their equity, even if it’s negative, which should be easier if property prices are low. You’ll need to get the property valued to ensure that whichever one of you is leaving receives all the money back that they put into the property, along with their share of any equity. Don’t forget, you need to be able to prove to your lender that you can afford the mortgage on your own to become the sole mortgage holder.
