Going through a divorce can create various complications both emotionally and financially.
It’s common to acquire a large amount of assets while married, with a popular example being a joint mortgage. This means you both have the right to live there and you’re both equally financially responsible for the repayments.
It’s only natural for someone to be concerned about what will happen to their home if they have a joint mortgage with an ex-partner. Navigating financial commitments like these can be complex, however here are steps you can take to alleviate the pressure.
Talk to your lender
Before you do anything, speak to your mortgage provider to make them aware of the situation. They might be able to accommodate these new circumstances by offering an extension, allowing you more time to make your repayments. Or, they may offer a repayment relief.
Be sure to bear in mind the long-term consequences these could have. They may appear as late payments on your credit report, which can have a knock-on effect on your ability to borrow in the future.
The main goal is to ensure you don’t miss any payments, otherwise, you risk a greater knock to your credit score and could face repossession of the property.
Sell the property
For many, the natural choice is to sell the home and split the proceeds, after paying off the remainder of the mortgage.
Divorce financial settlement solicitors can advise on the right approach – they can be especially helpful if you and your ex-partner can’t reach an agreement on how to split the proceeds. Although 50/50 often makes sense, it might not be appropriate in every situation. For example, one partner may have paid more towards the deposit or repayments.
While selling the property might make financial sense, it isn’t always the most practical choice if there are children involved. Some parents might not want to move from the area if their child is settled there. Or, perhaps only one of you is willing to sell.
Buy your partner out
If one of you is keen to stay and can afford the repayments, you have the option to buy the other person out of the mortgage. This is a common solution for those who decide to stay with the children to minimise further disruption.
To do this, you’ll need to contact your lender to see if this is possible and if so, move the mortgage in your name. Seeking their permission is important because having one person accountable for the repayments can provide less security. They will perform any necessary checks to make sure you can comfortably cover the repayments.
You can seek help from a solicitor or come up with an informal agreement to determine how much you should buy out the other partner for.
One person stays but you both own it
Alternatively, you can own the property together but only have one of you stay there. This is another common option for cases involving children – one parent still lives there with the family, while the other parent still owns it and keeps up with the joint mortgage arrangements.
For added security, you may want to seek a Mesher Order so that the property can’t be sold until a particular time. You might want to wait until the youngest child turns 18, for example. This order is issued through the courts.
Would you like to speak to a divorce financial settlement solicitor for advice? Don’t hesitate to contact a reputable family law firm that specialises in financial matters such as these.
