What does divorce mean for your mortgage?

Getting divorced or splitting up with your partner when you have an outstanding joint mortgage together can be difficult. Here are your options to make it less stressful.
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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

Keep paying the mortgage

If you are going through a divorce you need to keep paying the mortgage, even if you have moved out of the family home.

When two people take out a joint mortgage, both agree to be equally liable for the debt until the mortgage is paid off, not just while you live in the property.

If you do not pay the mortgage on time, this damages your credit history as well as your ex-partner's.

If one person refuses to pay, this can backfire if you lose your home as a result or if the divorce goes to court.

Contact your bank

As soon as you know you will be separating, let your mortgage lender know, especially if you could struggle to meet your mortgage payments.

Banks are usually sympathetic towards couples going through divorce or separation and may be willing to offer you a payment holiday to help ease the added financial strain.

This can give you some breathing space to deal with the initial separation but the original mortgage agreement will still be in place and a long term solution will need to be reached.

How to take a mortgage payment holiday if you fall behind

Work out your options

Sell up and move out

If you will both move out of the property, selling the house and paying off the mortgage can be the least messy way of moving on after a separation.

In these circumstances, any equity left after the mortgage has been paid off will be considered a marital asset and split between the two of you.

Exactly who gets what from the leftover funds can be open to dispute. Agreeing between the two of you who gets what is often quickest and cheapest.

If you cannot reach an agreement then the matter would need to be settled in the divorce court, where you would need to seek legal advice on your rights.

If you move out and buy a new property, you can compare mortgage deals here.

Continue to pay your existing mortgage

You may decide to continue paying the existing mortgage, especially if you have nearly paid it off and the divorce is on good terms.

This can also be useful if your mortgage is fixed for several years and would mean you would pay high mortgage charges to move elsewhere.

Make sure that both you and your partner can continue to afford to pay the mortgage and any other living costs.

Keep the property

If you or your partner intends to live in the home then you need to transfer sole ownership to the occupier.

  • Transferring the mortgage into one name will involve one partner buying the other's share in the property, including their equity.

  • You will need to prove that the occupier will be able to afford the mortgage on their own - remember the existing lender is under no obligation to remove either of you or to transfer the mortgage to one name.

  • If your lender believes you can afford the mortgage then they may agree to you becoming the sole mortgage holder.

  • You will then need to buy your ex-partner's share in the property before the mortgage can be put into your name. This may involve getting the current value assessed to determine the level of equity in the property.

How to get a new mortgage in just your name

Moving your joint mortgage into just one name can provide the same financial break as selling up while keeping ownership of your existing home.

If you need to borrow money to fund purchasing your partner's share you will need to prove that you can afford the additional borrowing.

You could then get a remortgage in just your own name. If you need help finding the right deal, contact a mortgage broker.

If you would prefer to move out and sell your stake in the house to your partner, this works in the same way.

If there is some dispute over the value of the property or the level of equity owed to your partner you could end up in court to negotiate a settlement.

Do you need insurance?

Yes, you need buildings insurance to get a mortgage on most types of property, but there are other types of cover you might need. For example, income protection insurance can cover your mortgage payments if you lose your job. This protection can be especially useful if you take over your mortgage payments on your own.

Can older borrowers get a new mortgage?

Yes, here is how you could find a mortgage. You can compare mortgage deals for over 50s here.

What if you are in negative equity?

If you get divorced while your joint home is in negative equity, it can be difficult to sell the home and pay off the mortgage in full.

You might have to split the outstanding debt between you or come to an agreement with your mortgage provider.

Speak to your mortgage provider to discuss your options or get independent legal advice.

If you then need to get a new mortgage, compare deals you can get with negative equity.

Here are all of your options if you are in negative equity.

Get advice

The right solution for you depends on your circumstances. For example, if there are no children involved then selling the property and cutting your losses may prove the best option.

But if your property is the family home, either you or your partner may want to continue living there to reduce the impact of the divorce on your children.

Whatever option you are considering, you should seek independent advice. You could use a solicitor or there are several charities and other organisations that can explain what you will need to do and point you in the direction of legal advice if required. Contact Relate or Citizens Advice for help.

You could also discuss your financial options with an independent financial adviser; here is a look at how to find one you can trust.

If your divorce has not proved as amicable as you had hoped and there is some dispute over who is entitled to what, then you may be faced with going to court.

You should be aware that very rarely is it a case of a simple 50/50 split when divorce proceedings head to the courts.

Courts take into consideration a wide range of circumstances when making a decision on what happens to the marital home.

If there are children involved then their well-being will be the primary concern of the court. They will also consider both parties' financial circumstances when making a decision.

If your divorce has reached this stage then you will need to seek independent legal advice. This can be a time-consuming and expensive undertaking but it is the only realistic option you have when faced with a trip to court.

You could avoid the disruption costs if you can agree as much as possible beforehand. Try using a third party like the Family Mediation Council, who may be able to help.

Consider your other financial assets

You need to work out how to split the rest of your finances when you get divorced

  • Your savings and investments, e.g. pensions, ISAs, savings accounts or shares

  • Money you owe, e.g. credit card debt, overdrafts or loans

Dividing your pension funds can be important because the amount you each built up could be worth more than your home, depending on your age and circumstances.

For step by step information on coping with the financial impact of divorce or separation take a look at our guide to getting a fair divorce settlement. It is also worth reading about how to separate your finances from your ex-partner.

No name on the deed?

If you are separating from your partner and your name is not on the mortgage or deed of the house that does not mean that you have no rights or claim on the property.

  • When it comes to divorce in the UK, the matrimonial home is considered a joint asset and you cannot be forced to leave by your partner.

  • If your name is not on the mortgage or deed you can register your matrimonial rights through the Land Registry to stop your partner selling without your consideration.

  • However, if your partner owned the property before your marriage then you will have little legal claim to it when it comes to divorce proceedings.

  • If you find yourself in this situation you should seek legal advice to determine exactly where you stand.

If you're a first time buyer or looking to move house or remortgage, we can help you find the best mortgage deal to suit your needs.