Divorce day: FAQs for property post-divorce
Following a divorce, many couples have lots of questions with regards to their property and what happens now they’re splitting up.
We’ve tackled some of the most frequently asked questions, but if there’s anything else you’d like to know about divorce and mortgages, then please don’t hesitate to get in touch with us today and our expert mortgage advisers will be able to point you in the right direction.
Who is entitled to the marital home?
Unfortunately, there isn’t a straightforward answer to this. It depends on many factors, and ultimately, the courts priority (if there are children involved) is always to make sure any children under 18 have a secure home to live in.
The house is in my name, does that mean I can stay in it and my ex has to move out?
Even if the house is in your name alone, if you are a married couple then this will have no influence on who stays in the house. Property is always considered a marital asset so whether the house in one person’s name or both, is irrelevant. It’s worth basing whatever agreement you come to on what the court might decide, for instance, taking into consideration maintenance payments.
I want to leave the house to my wife so she can remain living there with the children, but she can’t afford the mortgage on her own. What can we do?
First of all, your wife should see what benefits she might qualify for from The Citizens Advice Bureau. Once she knows exactly how much money she will have coming in, she can then work out if she is short on meeting the mortgage repayments. If there is still a shortage, you can support your family and contribute to the rest - this is known as spousal maintenance - or if you cannot afford the additional costs, the house will have to be sold.
If I transfer the property over to my spouse, is there no possibility of a future claim?
If you have filled out a TR1 form and transferred the title deed from two names to one, you may think that everything is sorted but this isn’t necessarily the case. The lender has a first charge against the property, so unless you have paid your mortgage off in full, then the property belongs to the lender and they are within their rights to reject any transfer of names from the mortgage. This can happen whether or not your spouse can afford to continue paying the mortgage repayments on their own. Always check with the lender first before transferring your ownership.
My ex-partner wants to keep the house but I want to sell it. What happens now?
A home can only be sold by one of two ways:
- Both parties agree to sell
- A court order
If neither parties can agree to sell the house, then as a last resort, a Judge will need to come to a conclusion as to what should happen going forwards. This can be costly, timely and often stressful for both parties as they’ll have to come to a compromise. You can appeal the Judge’s decision but this is only within a strict time frame and you could be left paying the legal costs if you lose your appeal.
My partner and I are splitting up, and I need to get a mortgage on my own. How do I do that?
It’s best to get yourself organised financially as soon as you can, so that you know how much you can afford either if you’re remortgaging to buy your ex out of your current property, or if you’re looking to buy a new place of your own. If you’re employed and want to apply for a mortgage you’ll need:
- Three months of pay slips (and any commission or bonus statements)
- Your last three months of bank statements
- Your last P60
If you’re self-employed and want to apply for a mortgage then you’ll need:
- Three years of accounts (some lenders will accept two, but three is better)
- Three years of your SA302 (which is a document from HMRC to prove how much tax you’ve paid on your earnings)
- Your last three months of personal bank statements
Whether you’re employed or self-employed, as well as the above you’ll also need two utilities bills to prove your current address, and either your Passport or Birth Certificate. You can also help your chances of being accepted for a mortgage by making sure that you’re registered on the Electoral Roll, and that your credit score is looking as healthy as possible. You can check your credit score for free online by going to Noddle or Clearscore. If you need advice about getting a mortgage, either contact your current mortgage lender and explain the situation to see if they will help you, or talk to a qualified mortgage adviser who’ll be able to work through the whole process with you and talk to lenders on your behalf to find the right mortgage for your circumstances.
I’m in my early fifties, and due to divorce. I’m now starting again and need to buy another property to live in. Will I still be able to get a mortgage, or am I too old now?
Different lenders have different upper age limits, and some don’t have any age limit on mortgages at all, so it’s possible that if you shop around, you’ll find a bank or building society who will lend to you. The main thing if you’re going to be borrowing in later life is that you can prove you can still pay the mortgage when you retire, and that you will have a reliable source of income, perhaps from a pension or investments.
I’m buying my ex out of the property we owned together…do I have to pay any Stamp Duty?
When a married couple divorce and one buys the other out of the marital home, no Stamp Duty (SDLT) is payable on the portion of the property that the ex-spouse is effectively buying from the other. However, it’s slightly different if you were co-habiting and not married, in which case Stamp Duty would be payable on the portion of the property that you’re buying from your ex.
I need to get a mortgage on my own; I work full time but I pay my ex-partner maintenance for our children. Will a lender reduce the amount that they might lend me because of this?
The short answer is most probably yes. Getting a mortgage is based on your ability to afford the repayments and, as with any other committed outgoings e.g. utilities, loan repayments etc., a lender will count any child or spousal support as a committed expenditure, so this is likely to affect how much they will allow you to borrow.
I need to get a mortgage on my own, but I don’t work full time. My ex-partner pays me maintenance for our children. Will a lender take these payments into account when they are assessing how much they might allow me to borrow?
If you work part time it’s still possible to get a mortgage. Some lenders will also take maintenance payments into account, particularly if awarded by a Court and documented in a Court Order. However, if these payments relate to children then it can be dependent on how old the children are and how long the maintenance payments will be made for. Other sources of income, such as benefits, e.g. Working Family Tax Credits and Child Benefits can also be considered by some lenders when they are looking at how much they will lend to you.
If you'd like to discuss your personal circumstances with an adviser, please feel free to contact our friendly team and we'll answer any questions you might have.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.