post divorce

Mortgage Advice Post Divorce: 5 Tips

It’s important to know what your options are regarding an existing mortgage during a divorce, to help you reach decisions you are happy with and feel are fair. In this article, we outline some of the choices you will have and also some basic mortgage advice post divorce on how to help secure your financial future. 

Be prepared to negotiate 

Throughout a divorce, it is important to be able to negotiate. The same level of cooperation will also be helpful when you are working through financial remedies proceedings and negotiating what will happen to your existing mortgage and marital assets.

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Remember that receiving a 50/50 split is not always the case in divorces. Sometimes, it may work that you receive more than this, for example, if there are other financial assets in your marriage, your former spouse may agree to keep those and let you retain the family home.  

Consider your options 

Depending on your circumstances, you will likely have a few options available to you. Typically, these are:

  • Buying out your partner by giving them a lump sum payment in respect of their equity share in the home and continuing to live in the property 
  • Jointly selling the home and each gaining a share of any equity to use towards a rental property or a new mortgage
  • Removing one partner from the mortgage and refinancing in one partner’s name. Note, it’s also advisable to remove their name from the house’s title deeds too 
Mortgage Advice Post Divorce

Keep your credit report in check 

Regardless of your next steps, it is always important to have a solid credit report. If you don’t have yours to hand, it’s advisable to obtain one. Unfortunately, in some circumstances, if a divorce has been particularly acrimonious, one partner may deliberately stop making mortgage payments, for example.

When this is the case, it’s important to know that if your mortgage was in both names, both parties are responsible for the full agreed repayments to be made. So, make sure you keep on top of payments and try to be amicable and communicative with your ex to keep relations as positive as possible.

Having a poor credit reference can have a significant impact on your ability to get a mortgage on another home and even when you are renting, your credit score will be taken into account. 

Know what you will need for a new mortgage 

Depending on your circumstances, you may have decided to take on the mortgage in your sole name or have used the equity from a sale to get a mortgage in your own name.

As with joint mortgages, applicants will need to show that they can afford the repayments every month. In some cases, if you are in receipt of benefits, you may be able to use these to help with your application.

Remember, if you have previously owned a home, you will be classed as a next-time buyer and not a first-time buyer. In all cases, a mortgage provider will check your credit rating, conduct an affordability assessment and seek proof of income and ID. 

Seek professional advice 

Getting financial advice from a certified mortgage expert and a family lawyer will help you reach the best decision for you.

It can feel like a real minefield of choices and options so gaining professional advice from a legal team on your financial decisions and support from a financial or mortgage adviser on your future housing arrangements will pay dividends. 

Mortgage Post Divorce

Mortgage Advice Post Divorce

Working out finances post-divorce can be stressful, but it’s important not to make any rash decisions in the initial stages. Take time to consider all the options available to you first. That way, you will be able to look back and appreciate that you took the best path.

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