How Does Divorce Affect My Mortgage?

There are often financial concerns in a divorce, especially when it comes to property. Often one of the biggest issues for divorcing couples is their mortgage and what is going to happen to the family home. In this article, we look at how divorce will affect your mortgage and the options available for you.

If you have a joint mortgage, then you are both legally responsible for the payments. This is the case regardless of your living arrangements following your separation. Even if one person moves out, the mortgage lender will still expect your mortgage payments to be made in full and on time.

There are a number of options available to you regarding your joint mortgage. Firstly, you can agree to sell the property, pay off the mortgage, and divide any remaining equity between you.

If you want to stay in the home, then you may be able to buy out your spouse’s share. This will normally involve remortgaging in your name only and this will be subject to affordability checks by your lender.

Some divorcing couples agree to keep the mortgage in both names for an agreed period of time, for example until shared children reach adulthood. This option requires a high degree of trust and clear financial arrangements.

Another option would be for your spouse to transfer their ownership rights to you, removing themselves from the mortgage entirely.

The right option will depend on individual circumstances, financial situations, and agreements reached during the divorce process.

If your name is not on the title deeds but you have contributed to mortgage payments or the property’s upkeep, you may still have a financial interest in the home. The court considers a range of factors when dividing assets, including contributions made during the marriage.

Although the starting point for property division in a divorce settlement is often a 50/50 split, adjustments can be made depending on factors such as whether children are involved and need a place to live; the financial needs and earning potential of both parties; and any agreements that were made during the marriage.

If you are concerned about your rights to the property, it is essential to seek legal advice as soon as possible, including registering a Matrimonial Homes Rights’ Notice where necessary. A family solicitor can help you understand your entitlements and ensure you receive a fair settlement.

If you and your ex-spouse decide that one person will take full responsibility for the mortgage, the other’s name will need to be removed from both the mortgage and the property title.

This will involve remortgaging, and your lender will assess whether the person taking over the mortgage can afford the payments on their own. If the lender is satisfied, they will release the other party from the mortgage agreement. If the remaining individual does not meet the lender’s affordability criteria, they may need to find alternative solutions.

Until a name is officially removed from the mortgage, both parties are legally responsible for repayments. Missed or late payments could impact both credit scores.

If you want to take on mortgage and keep the family home, you will need to prove to your lender that you can afford the repayments. Lenders will assess your income and financial stability, your existing debts and credit history, and whether you can provide a lump sum payment to buy out your ex’s share.

The family home is often one of the most valuable assets in a divorce, and how it is divided depends on the financial settlement reached between both parties.

The main factors influencing the division of property include whether children are involved and need stability in the home; each party’s financial contributions and needs; whether one person can afford to buy out the other; and any pre-existing agreements, such as a prenuptial agreement.

If an agreement cannot be reached, the court may have to determine the fairest way to divide the property. This can result in selling the home, transferring ownership, or delaying the sale until certain conditions are met, for example children reaching adulthood.

Whatever you decide to do – whether you want to remain in the family home or sell the house and buy a new one – it important to understand your rights and responsibilities. Talking to a family law solicitor about your options will help you make informed decisions about your mortgage and where you live.

Ready to take the next step? As leading divorce solicitors in Milton Keynes, our team of family law specialists can advise and guide you from the moment we start working with you. As well as our head office in Milton Keynes, we also have offices in Bicester, Watford, and London where we can arrange appointments to see you in person. Talk to us in confidence and find out where you stand. Get in touch – we’re here to help.

This article is intended for the use of our clients and other interested parties. The information contained in it reflects the author’s view and is believed to be correct at the date of publication. However, it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional legal advice.