Divorce and Mortgages

Introduction to Mortgages and Divorce

With nearly 40 percent of marriages in the UK ending in divorce, it is little wonder that the issue of dealing with jointly owned property and mortgages has become a far more widespread problem. In fact, a large part of the work of family solicitors now involves resolving issues associated with the family home after marital break up.

Potential Issues with Mortgages and Divorce
There is a basic presumption that any assets accrued over the length of the marriage are owned jointly with a 50 / 50 split. However, when it comes to the family home, this may not be the case and different factors will be used to determine the ownership split.

Additional factors that may come into play when determining what happens with the family home during a divorce include how the property was held legally, in the first instance. For example, theoretically, if one partner is the sole owner of a property, he / she may have a greater claim on the marital home, although even this can be rebutted by a court in order to ensure that the split is carried out in an equitable way.

Whenever there is a divorce and also a home involved, there will always be difficulties deciding how two separate living quarters are going to be financed. Even with an amicable split, there is still the need to locate two separate living quarters from the previous one home. This will normally require the couple to sell the property in order to release the cash in the property, thus allowing both individuals to purchase separately.

If the couple have sufficient financial resources, it may be possible for one partner to remain in the family home; this is a particularly popular option when there are children involved. In this instance, it will be necessary for the individual staying in the property to obtain additional financing to buy out the leaving partner.

Dealing with Divorce
Whenever there is an imminent divorce, it is absolutely vital that you notify your mortgage lender as a matter of priority. By informing your lender that your circumstances are changing, you may be able to arrange a temporary payment holiday while the situation is resolved. Moreover, the lender will be able to discuss with you the range of mortgage options that are available to you as an individual.

Always remember to seek independent financial and legal advice, as what is best for your ex-partner may not be what is best for you.

Summary
With an increasing number of divorces now occurring in the UK, the issue of what to do with a family home when a couple split up has become a large conundrum;
generally, with assets it is presumed that they are to be split 50 / 50; however, with the family home, this can be adjusted to suit individual circumstances;
as soon as it becomes clear that a split is likely, it is wise to discuss the situation with your mortgage lender as they may be able to offer assistance and advice.