What Happens To Your Mortgage After A Divorce?

Will I Still Be Liable for the Mortgage After Divorce?

The short answer is yes, you’ll still be liable for paying the mortgage even after divorce – at least in the short term. 

When you took out a joint mortgage, you both became EQUALLY responsible for making the repayments until the full amount is paid off. 

This remains true even if one of you moves out of the property during the separation period.

Falling behind on payments can severely damage both your and your ex’s credit scores. 

In a worst-case scenario, it could even lead to your home being repossessed. So it’s crucial you keep up with the mortgage while divorcing.

Do I Have to Tell My Mortgage Lender About the Divorce?

As soon as divorce proceedings start, it’s a wise idea to notify your mortgage lender. 

Most are sympathetic to divorce situations and may allow a temporary mortgage payment holiday to ease the financial strain initially. 

However, this is only a short-term solution – you’ll need to decide on a longer-term plan.

Your lender can explain what your specific options are for either removing one party from the mortgage or transferring it into one name. They may even have special policies in place for divorces.

What Options Do We Have for the Mortgage?

Divorce brings many decisions, and your mortgage is a big one. Here are four main paths to consider:

1. Sell the Property – This is often the simplest solution. Selling allows you to pay off the mortgage and split any remaining equity. However, agreeing on how to divide the proceeds can be tricky and might require legal advice or a court settlement.
2. Continue Sharing the Mortgage – If your mortgage is nearly paid off or you want to minimise disruption for children, you might choose to keep the house and continue paying jointly. In such cases, consider a Mesher Order – a legal document that prevents the sale of the home until a specific event occurs like your children finishing school.
3. Buy Out Your Ex-Partner – One partner can buy out the other’s share of the property, transferring the mortgage solely into their name. This requires proving affordability to the lender and might involve getting the property revalued.
4. Transfer Part of the Home’s Value – Another option is to transfer a portion of the property’s value as part of the financial settlement. This allows one partner to remain in the home while the other retains a stake in its future value.

What If We’re in Negative Equity?

Being in negative equity (where your outstanding mortgage exceeds the property value) during a divorce adds further complications. 

In this situation, simply selling likely won’t cover repaying the full mortgage loan.

You may have to agree to split the remaining mortgage debt between you or try to negotiate an arrangement with your mortgage provider. 

Getting independent legal advice is highly recommended if you’re in negative equity.

Can My Ex Force a Property Sale Without My Consent?

If your ex-partner is the sole owner of the property on paper, you might be concerned they’ll sell the house during your divorce without your agreement. However, you have rights that can protect you in this situation.

In the UK, the marital home is considered a joint asset, so you cannot be forced to leave without a legal settlement. 

To safeguard your interests, you can formally register a Notice of Home Rights with the Land Registry. This action prevents your ex from selling the property until the divorce is finalised and a court settlement is agreed upon. 

This protection is temporary, ensuring your right to stay in the home until a final order is made regarding the property assets.

However, if your partner owned the home before the marriage, your legal claim might be more limited. 

In such cases, it’s essential to seek legal advice to fully understand your rights and options.

Do I Need a Solicitor to Sort Out the Mortgage?

For most divorces involving a property, it’s wise to at least consult a solicitor or legal professional. 

They can ensure your rights are protected and advise on all available options for your specific mortgage situation.

If you and your ex disagree over what to do with the mortgage and home, going to court may be inevitable. 

This is where good legal representation is essential for reaching a fair resolution judged by the court.

How Easy Is It to Get a Mortgage After Divorce?

Homeownership days are not over just because you’re getting divorced. With careful preparation, securing a new mortgage as a single applicant is absolutely achievable:

• Build up your credit score by making all debt repayments on time
• Save up a deposit for a new property (lenders like to see 3-6 months’ mortgage payments)
• Provide proof of income, ideally, employment details going back 1-3 years
• Seek the right lender who takes a sensible approach to divorce applications

You may need to be open to getting a guarantor on board too, such as a close family member, to reassure the lender you can afford a solo mortgage.

How Do I Take Over the Mortgage After Divorce?

To take over the mortgage, you must prove to the lender that you can afford the payments on your own. 

This involves a thorough assessment of your financial situation. 

If you need a larger loan to buy out your partner’s share, you’ll need to show your ability to handle the increased financial burden. A Transfer of Equity is necessary to change the ownership of the property officially.

What Is the Best Option for Divorce Mortgages?

The best solution depends on your unique circumstances. For those without children, selling the property might be the most straightforward option. 

However, if children are involved, keeping the home might be preferable to minimise disruption. 

Regardless of your situation, seeking independent advice from a solicitor or a mortgage advisor is crucial to making an informed decision.

Consider All Your Combined Assets and Liabilities

Divorce isn’t just about the house and mortgage.

It’s about fairly dividing all your shared finances, possessions, and debts. Here’s what you need to consider beyond the bricks and mortar:

• Retirement pensions and savings (which are often more valuable than the house itself)
• Investment accounts like stocks or ISAs
• Outstanding debts like loans, credit cards, overdrafts, etc.

Family courts rarely split the marital “pot” of assets in a clean 50/50 split. They consider various factors when making a final settlement, such as:

• Who will be providing a home for children?
• Earning potential of each spouse
• Age and health of both parties

Remember, a fair and balanced settlement considers all these factors, not just a straight down-the-middle division.

The Bottom Line

Divorce brings many challenges, but dealing with your mortgage doesn’t have to add to the stress.

By taking proactive steps, seeking professional guidance, and exploring all your options, you can resolve your mortgage situation efficiently.

Don’t lose hope – with perseverance and the right approach, you can split your housing situation amicably and both find yourselves in comfortable new homes before long.

For personalised advice, a mortgage expert can clarify your options and guide you towards the best solution for your unique circumstances.

Need a qualified broker? We can help! Just get in touch and we’ll connect you with a mortgage advisor who can answer all your questions about navigating your mortgage after divorce.