It’s not nice to consider what may happen to your mortgage if you were to break up with your partner. It’s something you would never want to think about, but sadly things don’t always work out the way you planned. And if you do break up, shared finances such as a joint mortgage could become a big worry.
This is why it’s essential that you know what to do should this sort of situation arise. So, we want to break down the steps you can take and what happens to your joint mortgage after you break up.
The joint mortgage after separation
If you split up from your partner and you have a joint mortgage, this will remain in place until some kind of action is taken. Whether this is buying out your ex-partner, transferring the value of the mortgage, paying it off, or selling the property.
Remember, when you take out a joint mortgage with someone, you both will usually become ‘joint and severally liable’ for any and all repayments of the loan. You both will also remain liable for the repayments until the agreement is formally ended.
It won’t matter how you made the payments before you separated (for example, if one of you paid a higher percentage), the lender will just want all the repayments made.
If one of you wants to sell the property
If one of you wishes to sell the property after splitting up, you will need to get written approval from your ex-partner before listing the property on the market. You could also look to buy out your ex-partner, in order to end the joint mortgages and have the property in your name only. Thereby breaking this financial link to your ex-partner.
In order to buy them out, you will need to prove to the lender that you are financially able to make the monthly repayments, based on your earnings and savings. Of course your former partner will also need to give their consent to be removed from the mortgage.
Separating the joint mortgage
You can separate the mortgage, by transferring a part of the property’s value to your ex-partner. This way you would still own a certain percentage of the property, while your former partner retains a stake in it too.
If you then decide to put the property on the market at a later date and you successfully sell it, your ex would receive a proportional percentage of its value.
If someone doesn’t pay the mortgage
As mentioned, you will both be liable for the repayments until you reach a formal solution. This could either be an agreement on the actual property or in regards to your personal circumstances.
When one of you starts to miss payments, this will negatively affect both your credit ratings. If both names are still on the deeds, you remain financially linked, and therefore one person missing a payment affects both parties.
It’s very important that both of you continue to pay your parts of the repayments, otherwise you’ll be liable for the full repayment. If your ex stops paying their share, it’s best to seek professional legal advice, and also get in touch with your lender. They may offer a temporary solution until a permanent one is found.
Always ask for support
Going through a break-up is tough, and can take a huge emotional toll. Naturally it’s stressful to also worry about your finances during this time, so it’s always best to seek the help and support you need straight away.
Speaking to experienced professionals can ensure that you fully understand your responsibilities and exactly the next steps you can take to deal with the situation.
If you have any worries or questions at all, please don’t hesitate to get in touch with our warm and friendly team today on 0345 305 2540, or at info@taylormade-finance.co.uk.
