What does a divorce mean for your existing mortgage?

If you're jointly responsible for a mortgage with your departing spouse, it's likely you'll want to amend this situation.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
It can be safely assumed that at least one person will be moving out of the marital home after a divorce and that this person won’t want to keep making the mortgage repayments.

As such, it’s best to amend the situation in one of the following ways:

  • You sell the property and share the profits.
  • The departing spouse sells their share of the property to their ex.
  • The remaining spouse remortgages to claim sole ownership of the home.

You’ll either agree on a solution, or have the divorce courts decide for you.

Remortgaging or getting a new mortgage after divorce

There’s no guarantee that your mortgage lender will allow you to remortgage after a divorce. The remaining spouse will need to prove that they can afford the mortgage repayments on their own.

This will involve:

  • Affordability checks
  • Credit checks
  • A new valuation of your property

The departing spouse will have to go through the same checks before securing a mortgage on any new property.

The problem is that lenders will want to consider any income (or loss of income) that arises from your divorce settlement before approving any new mortgage deal. These financial terms can take a long time to finalise, and divorcing couples are often stuck with their joint mortgage for a while.

During this time, you’ll remain jointly responsible for the monthly repayments.

If you applied for any financial product jointly with your ex-spouse, you’ll continue to be financially “linked” with them until these products are closed.

During this time, your credit score will continue to be considered jointly, even if you apply for new financial products individually.

If your ex-spouse has worse credit than you, it’s therefore worth your while to settle your debt and close these products as soon as possible.

Using a mortgage adviser after divorce

Divorce undoubtedly makes it more complicated to be approved for a new mortgage. That’s why it’s recommended to use a mortgage adviser to help you find the best deal for your personal circumstances. These professionals will be able to point you towards the most affordable products you’re likely to be approved for, allowing you to secure a great deal without any hassle.

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