What happens to a mortgage in a divorce?

December 22, 2023

The first working Monday of the year, dubbed ‘Divorce Day,’ often sees high volumes of enquiries to divorce lawyers. After a festive period that can either strengthen bonds or unveil irreconcilable differences, many find themselves ready for a dramatic change come January.

While divorces happen all the time, between April to June 2023 there were 18,536 sole applications and 6,088 joint applications made for divorces, many people don’t know exactly what happens to a mortgage after divorcing. We are regularly asked this question by our customers.

We understand divorce can be a difficult and stressful process, especially when it comes to your finances, so we’ve detailed what happens to your mortgage in our latest blog.

Who is responsible for the mortgage payments?

If you have a joint mortgage, you are both legally liable for the repayments, regardless of who lives in the property or who contributes to the payments.

This means that if one of you stops paying or falls behind, the other one will have to cover the shortfall or risk damaging both your credit ratings and losing the home.

Tip: Don’t let your credit take a nosedive; talk to your lender. They might be open to a payment holiday or a pocket-friendly plan until you are back on track with your finances.

What are the options for your home and mortgage?

It’s good to know there are lots of solutions to your mortgage when you divorce, depending on your preferences. Some of the most common options are:

Sell the home and split the proceeds

This is perhaps the simplest of all the divorce options. Sell the house, clear the mortgage, and you and your partner are free to feather new nests by splitting the capital gain from the sale.

However, we understand not every married couple wants to up and move their home, especially if children are involved.

Whether the property market is favourable at the time of your divorce will also play a part in choosing to sell. This is where a mortgage adviser will be invaluable in giving you expert guidance on the market and will help find an option that is right for you.

Buy out your ex-partner’s share of the home

If you want to stay in the home and you can afford to do so, you may be able to buy out your ex-partner’s share of the equity and take over the mortgage. You will need to agree on a fair valuation of the property and how much equity each of you has.

As a joint mortgage is made based on both spouses’ affordability, you will need to prove to your lender that you can afford the repayments on your own or with a new co-borrower.

You may need to remortgage to release some equity to get a better deal on the share of the property.

Keep the home and the mortgage as they are

While keeping a home and mortgage the same as it was before divorce isn’t always ideal, it’s entirely possible, even if one of you moves out.

This can be a temporary arrangement until you finalise your divorce settlement, or a longer-term solution if you have children who need to stay in the family home.

Both spouses will remain liable for the mortgage and any maintenance costs, so it’s important to ensure you and your partner share mutual trust in each other to uphold these responsibilities.

You will also need to agree on how to share the equity and the income if you decide to sell or rent out the home in the future.

How can you get advice on your mortgage and divorce?

Getting advice on your mortgage and divorce from an expert is crucial to ensure you achieve an outcome that protects your finances.

A mortgage adviser can help you understand your options and find the most suitable mortgage deal for your situation.

At Newhomes, we have a team of expert mortgage advisers who can help you with your mortgage and divorce. We can offer you impartial and personalised advice, tailored to your needs and goals.

We can also help you compare and apply for the most suitable mortgage deals from a wide range of lenders.

Why Newhomes advice for my mortgage?

We’ve expertly handled many mortgage cases, even in complex cases where divorces are ongoing.

We’re highly trusted and have fantastic accolades:

We won the Gold Trusted Service Award 2023.
We have 1000s customer reviews via Trustpilot, Google and Feefo.
We won the Sesame Winner Firm Of The Year 2022.
Barclays Winner Best Diversity Initiative 2023.

Mortgage Divorce FAQs

Do I need to tell the mortgage lender about the divorce?

Yes, it is generally a good idea to inform your mortgage lender about your divorce.

By informing your mortgage provider they can guide you on any necessary changes to the loan or payment arrangements.

How likely is it to keep a house during a divorce?

The likelihood of keeping a house during a divorce depends on various factors such as financial stability, ownership details, and the willingness of both parties to negotiate.

It’s important to consult with legal professionals who can provide guidance based on your specific situation.

Can you be forced to sell your house in a separation?

In separations or divorces, the legal system often decides how assets, including the home, are divided.

This may involve selling the home to fairly split the property. However, the details can differ based on your location and any prenuptial or postnuptial agreements you have.

A family lawyer will help you understand how these laws apply to your situation.

Should I buy a house or wait for my divorce?

Can’t wait to start fresh in a new home? It’s completely your choice, assuming you have the finances to buy a new property, you certainly can pursue a new property regardless of what stage of your divorce you’re in. However, there are some things to consider:

Financial stability: Make sure you’ve got the finances to commit to a new mortgage, knowing your affordability factors in any potential loss in support from your ex-partner.
Emotional stability: It can be an emotional rollercoaster getting a divorce, so it’s wise to make sure you’re emotionally ready to take on buying another home.
Legal implications: Consult with your lawyer about any potential legal implications of purchasing a house during the divorce process, such as how it may affect property division.
plans: Think about your long-term goals and whether buying a house aligns with those plans.

Is it harder to apply for a mortgage after a divorce?

Getting a mortgage after a divorce may have some challenges, but it doesn’t always make it harder. Consider these factors:

Income Changes: If your income decreases or you take on more debt during the divorce, it may impact your mortgage eligibility.

Assets and Liabilities: The division of assets and debts in a divorce can affect your ability to qualify for a new mortgage, especially if you have additional debts after getting the family home.

Credit History: Divorce can impact credit scores if bills go unpaid or joint accounts need closing. Review your credit report and address any issues before applying for a mortgage.

While these factors can create challenges, they don’t make it impossible to get a mortgage post-divorce. A mortgage adviser can help you navigate all these factors.

What if the house is in negative equity and I am getting divorced?

Things get tricky in a divorce with negative equity, where the house’s mortgage is more than its value.

Negative equity means you owe more on the mortgage than the home is worth.

During divorce, assets and debts are divided. If the house is in negative equity, both spouses might still be responsible for the remaining mortgage, even if one moves out or transfers ownership.

A family lawyer will be able to advise on all options available to provide a solution.

What Can I Do if My Ex-Partner Stops Paying Their Share of the Mortgage After Separating?

Talk to your ex-partner: Reach out and discuss the issue. They might have financial difficulties or a valid reason. Open communication can help find a solution.

Check legal agreements: Review your separation agreement or court order for mortgage terms. This will outline both spouses’ responsibilities and how to handle non-payment.

Contact your lender: Inform your mortgage lender about the situation and they may suggest options like refinancing or modifying the loan to ease the financial burden.

Seek legal advice: A family lawyer can help you understand your rights during this process and can sometimes resolve the issue of non-payment between you and your partner through mediation.

Remember, each situation is unique, so seek advice tailored to your circumstances.

Should you hire a mortgage adviser when getting a second mortgage after a divorce?

Hiring an adviser when getting a second mortgage after a divorce will be very helpful, as they can provide guidance and assistance throughout the process.

A mortgage adviser can help you navigate the various options available to you and help you find the right mortgage solution for your specific situation.