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How To Divide Your Home And Mortgage During A Divorce

MORTGAGES | 19.05.2017

Going through a divorce is rarely an enjoyable process. For most people, ending a marriage can be an incredibly upsetting time and one that’s worsened by the stress of separating joint assets and belongings.

If you own a home together, the separation can be made that little bit more difficult. Here’s our guide on what happens to your mortgage if you go through a divorce.

Do you want to keep the property?

If you or your former partner intend to stay in the property, ownership will need to be transferred to the occupant. The person planning to stay will need to buy the other person’s share in the property. The mortgage lender will also want to see proof that mortgage repayments can continue to be made on one person’s salary alone.

Do you want to sell the property?

If both you and your former partner will be moving out of the property, it makes sense to sell the house and pay off the mortgage. This may be the best way to minimise the amount of stress involved in the separation, as you can divide the money from the house sale between you. The equity left in the property once the mortgage has been paid off will be considered a marital asset and will be split accordingly.

Are you stuck in negative equity?

If your property is in negative equity and you’re unable to pay off the mortgage with your home’s current value, you may find yourself with restricted options. Speak to your mortgage provider to find out if there’s anything they can do. It may be possible to split the outstanding debt between you.

Do you have children?

If you and your former partner have kids, you may want to find ways to lessen the impact on the children during the separation. If one parent has been given sole or primary custody, you may decide that the children should continue living in the family home. If the other parent moves out, ownership will need to be transferred. No matter how you decide to divide the home, in the early stages of the separation, there are two things you must do before proceeding:

1. Ensure you keep paying the mortgage

If you’re going through a divorce, there may understandably be some disagreements in terms of who pays the mortgage. No matter who you and your former partner think should make these repayments each month, if the property belongs to you both, you’re both responsible. Failure to pay the mortgage on time can damage both of your credit histories.  

2. Contact your bank

Once a separation has been decided, contact your bank to discuss your options. Some banks will be willing to offer you a payment holiday to ease any financial strain, but it’s wise to determine whether this will increase the amount you’ll pay in interest over the long term.

Finding financial advice

When it comes to dividing the value of a home following a divorce, there’s no one-size-fits-all solution. The right option for you will depend on your own circumstances and plans for the future. If you’d like help remortgaging your property after a divorce, please get in touch with our team of experienced mortgage advisors.
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Our address for this is:
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