Why you need a mortgage expert sooner than you think when you’re getting divorced – by Carl Mountain
“I’m going to my mother’s!” (and slamming the door) doesn’t let you off the hook if the marital home has a mortgage on it and you decide to get a divorce. If your name is on the mortgage, you are as liable as your spouse for the payments. So getting divorce financial advice early on is a good idea.
What’s yours is his and what’s his, is yours – including debts and mortgages. And if the payments are not made, your credit history will be damaged.
So getting to a place of financial independence as soon as possible – even before the divorce is completed – is vital. It’s never too early to sit down with a financial planner to look at how to achieve that independence in the longer term – and also to deal with mortgage and property issues in the short term.
Your financial advisor will suggest that you contact your mortgage company and if the situation is complex (spouse refusing to pay the mortgage but has control of the purse-strings) then the mortgage company may offer a payment holiday – which can buy you valuable time. Getting divorce financial advice at an early stage is a very good idea.
What are my mortgage and financial options?
If your name is not on the deeds, then you can register your matrimonial rights through the Land Registry to stop your partner selling against your wishes. Especially if the house was bought after you were married.
When it comes to divorce in the UK, the matrimonial home is considered a joint asset and you cannot be forced to leave by your partner. Don’t let them bully you into thinking they can. This is why getting some initial legal advice is a good idea.
Providing your house is easy to sell, just both moving out and selling up can seem the simplest option, and may allow a clean break divorce settlement to become a realistic solution. However, if your kids are settled in the local school, and you are not going to be able to buy a big enough house for the family with the proposed divorce settlement, then selling up may not be the best option.
A mortgage expert can advise on how likely the house is to sell and for what price (because they know the market intimately), they can also provide realistic information on what a new property mortgage will cost you in real terms, and whether you can even get a mortgage.
Often non-working wives think they can buy a new place and get a mortgage unaware that mortgage companies prefer people with a career and a strong past record of payments – which may be true for their spouse, but not for the parent who has been home for 10 years bringing up the kids.
If you stay in the property post-divorce, then the mortgage company may not want to add your name to the mortgage if you haven’t got the income to support that, so you can end up spending years in a house that is owned by your Ex – and possibly then have to sell it when the youngest child leaves school in order to pay a portion of the equity to your Ex as part of an earlier divorce settlement agreement. But will that leave you enough to buy a flat, never mind a house?
Divorce Financial Advice
So to really look at all the options, and how to avoid unnecessary tax implications, it’s vital to work with a financial planner. Lawyers are not trained to look into the future and work out whether you will have enough money to live off when you are 65. Financial Planners are trained to do that. And mortgage expertise will be an important element of making those calculations.
For mortgage and divorce financial advice, have a no-obligation chat with Carl Mountain: Click here to see more about how he can help….
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