Divorce & Mortgages – Finding where you and your assets fit.

Recently I know myself and other Brokers have seen an increase in client enquiries into what happens in regards to a joint mortgage if they divorce a spouse. This seems like a perfect opportunity for me to put together a blog on the breakdown of what you need to know. Here are some divorce-related enquiries that could relate to your circumstances.

• Remortgaging to buy out partners

• A Mortgage to purchase another property

• Remortgaging to cover settlement costs

• Single parent Mortgages

• Joint borrower sole proprietor Mortgages, when you seek financial help from a family member

Like with any financial commitment, there may come challenges, but here is some advice that may help. First of all, if you have children then financial commitments surrounding them such as school fees, and child maintenance payments would still have to be considered. But likewise, when it comes to income then it's not only employed income that can be considered. The sorts of income that lenders can take into consideration would be child maintenance, child tax credit, working tax credit etc. Lenders will also look at other circumstances such as the loan against the value of the house. It is important to remember that going through a divorce there will likely be financial implications on both sides.

With divorce comes the inclination to keep the family home, especially when there are children involved. This will not always be possible, because the mortgage to begin was based on a combined income from both partners. However, I understand that circumstances change and if I can help you keep the family home, then I will do everything that I can to help you. Often one partner will want to buy out the other partner's share in the mortgage. If, however, it is the main earner that will be moving out. The partner set to remain on the mortgage must demonstrate to a lender that they have enough income to support the mortgage with just their income.

When you share custody of your children, there may be that one parent would need to provide child maintenance payments to the other parent, depending on the circumstances. These payments are crucial in terms of affordability from a lender's point of view. Lenders now have a much more flexible approach to these types of payments being used towards affordability. As standard lenders will want to see proof of these payments. This can either be done by your solicitor writing a letter, providing 3 –6 months proof of payments or a CSA letter may be sufficient.

For some newly divorced individuals joint borrower sole proprietor mortgages may be an option. If affordability for the individual is an issue, then a JSPM is the route they may want to consider. JSPM is when a family member or such is added to the mortgage application. This makes the process of being newly divorced and house-buying a lot more stress-free. Remember, when going through a divorce it is important to seek professional financial and legal advice. This will help the process, with what is already going to be a stressful time in life. Reach out to a Broker that understands the situation. It is also a good idea to have a clear outlook on what the divorce settlement will look like.

As ever, please do reach out if you find yourself in a similar position.

All the best

Emily Cull | Sabre Financial Services LTD