It’s sad to admit, but divorce happens sometimes. With divorce comes the division of assets, and this includes the house. There is a lot to think about, such as whether you want the property to be sold or not, or you want to buy out your spouse. There are also a few other things to consider, but no matter the circumstance, it’s a personal decision to make. However, this guide will help you understand your options for dividing ownership of a property in a divorce. We will also discuss how you can get a new mortgage after your marriage has ended.
How is a house divided in a divorce?
Although you and your partner may have discussed this when things were less rocky, it may be a more complicated process now. It’s important to seek professional advice if you find yourselves struggling to come to an agreement.
Whatever you decide, you will need a property valuation to create a settlement price. Again, if you cannot agree on a settlement figure, the court will order a joint report from a local estate agent and surveyor. Here are the three most popular options for dividing or transferring ownership of property:
1. Both selling and moving out
As frustrating as it can be, it is often the best option for both parties, particularly when neither partner can make a decision.
2. Selling later
For some couples, selling after a divorce is seen as a good idea. Most couples wait for a certain event to occur, such as a child turning 18 or starting a new school before they sell. When this happens, one person will likely stay in the home and the other will move out.
3. Buying your partner out
Depending on your financial situation, you could buy your partners’ share in the property.
What happens to a joint mortgage when you divorce?
Once divorced, both you of will be financially tied if you have any joint finances such as a mortgage. This means that any failure to make mortgage repayments could damage both of your credit scores. This can have an impact on your chances of getting a new mortgage later on.
If one party refuses to pay the mortgage, whatever the reason may be, it could result in the property being repossessed. This is why you need to inform your mortgage lender of your situation right away.
Taking on your partner’s share of the mortgage
After a divorce, you may be wondering how you can sell in joint names or how you can get out of a joint mortgage. It isn’t uncommon to choose to transfer your joint mortgage into a single person’s name, which means only that person will be responsible for mortgage repayments.
This can be helpful, as:
- it breaks all financial ties with your ex-partner
- it stops the risk of mortgage repayments being compromised
- it allows the person taken off the mortgage to apply for a new one on a new property
However, if you choose to follow this route, you must make sure you can pay the mortgage on time. If not, you will face repossession. Your mortgage lender will be able to calculate whether you can afford mortgage repayments. If there is no way to afford it, you will likely need to sell up and move somewhere more affordable.
There are other options available, such as a guarantor mortgage, but you will be asking someone else to take a risk for you and not everyone will be willing to be your guarantor. If you fail to make any payments, they will be liable to cover what is missed. If they can’t afford to pay it, there is a chance they could lose their home too.
Buying a house and getting a mortgage after divorce
Once you have sold the property and look to move elsewhere with a new mortgage, you need to look at your financial situation. When speaking to mortgage lenders, they will consider many factors, including your deposit, income, credit score, debt, average monthly expenditure and more.
Be aware that some lenders will consider granting 100% mortgages to those who have suffered a relationship breakdown. However, an independent mortgage broker will be able to advise how much you could borrow to successfully move.
Selling your property with Joules Estate Agents
If you need to sell your property in the Heaton’s, you need the right estate agents for the job. At Joules, we know the entire area like the back of our hands, which means we can find the perfect buyer for your home. If you’d like to learn more about our services, get in touch.
