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What happens to a joint mortgage after a separation?

What happens to a joint mortgage after a separation?
Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: July 22, 2022

Going through a divorce or separation can be very stressful, so it’s important that you understand the options open to you if you have bought a home together. If both parties are amicable, then it will be so much easier.

Keep up the mortgage repayments

This is absolutely vital. Even if your partner stops paying their share, you need to keep the payments up-to-date or it will affect the credit score of both you and your partner.

And if you end up with bad credit or defaults, it may make it difficult to remortgage if you intend to buy out your partner’s share.

If you are having difficulties making the payments, speak to your lender as soon as possible. Depending on the terms and conditions of your mortgage agreement, they may be able to offer you a payment holiday, which might give you enough breathing space. Bear in mind that you will still pay interest and will have to make up the missed payments at the end of the mortgage term.

Buying out your partner.

You’ll probably need to take out another mortgage, so you’ll need to be able to prove to your lender that you can meet the repayments and are a good credit risk. This is why keeping up the repayments is crucial.

Sell the property.

This is probably the simplest solution. Put the house on the market and, after the balance of the mortgage has been paid back to the lender, split what money remains.

Pay off what remains of the mortgage.

If you are only a couple of years away from the end of the repayment period, it might make sense for you to both keep making repayments and sell the home and split the proceeds when it’s completely paid off.

Sell or buy a greater share in the property

By transferring a greater share of the property to one partner, that partner would own a higher share of the property, but the other would still have a partial share. The percentage of share would affect how much each partner would receive when the property is sold. This could work well if neither partner can buy the other one out completely.

See if you can find a guarantor.

This could be a family member or close friend. A guarantor mortgage is when someone acts as a guarantor for the mortgage, which means they must step in to make any payments if the borrower cannot make them.

As with any decision that may have long lasting financial implications, you should always consult an expert for the best advice and guidance.

There are also charities like Citizens Advice that offer free advice if you are struggling financially.

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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