Fortunately, there are plenty of options available when it comes to making arrangements for your joint mortgage after separating with a partner, from buying them out, to selling the property and splitting the proceeds between you.
This guide explains all you need to know to help you and your ex-partner come to an amicable arrangement, ensuring the process is as hassle-free as possible for you and any dependents you may have.
What should I do if I have a joint mortgage with an ex-partner?If you have a joint mortgage with a partner, each person owns an equal share of the property. This means that if you split up, you each have the right to remain living there. It also means you’re equally responsible for the mortgage repayments.
Paying the mortgage after a separationEven after a separation, it’s important that both you and your ex-partner continue to make your joint mortgage repayments until you’ve decided what to do. Regardless of whether you’re both living at the property, you’re still liable for the debt.
When you have a joint mortgage, you become financially linked. This means that if you miss payments or fall into arrears, this will have a negative impact on both your and your partner’s credit file - which could impact your ability to get a new mortgage, or any other type of finance, later down the line.
If you’re experiencing financial difficulty after a separation, it’s best to contact your lender immediately. Missed payments don’t benefit anyone, and there are plenty of temporary solutions which could help make your situation more manageable.
What are my matrimonial rights?In the UK, living together as a married couple means your home is legally considered a joint asset - even if only one partner’s name is on the deed. This means that no one can be forced to leave the property while you’re still officially together.
If the property is only listed in your partner’s name, you may be able to obtain a Notice of Home Rights from HM Land Registry to prevent your home from being sold without your permission - although this will only be valid until a divorce settlement is agreed.
If a mortgage was taken out in one partner’s name before the two of you got married, the other has less of a claim on the property unless you have a prenuptial agreement in place saying otherwise.
Should I go to court?Separations can get complicated if you aren’t in agreement about what to do about the family home. Going to court can be stressful and very expensive, so it’s always best to try and resolve issues informally or through mediation.
If this isn’t possible, you may have to allow the court to settle your joint mortgage disputes. There are a number of factors which can impact a court’s decision about your home, but if there are children involved, their wellbeing will be the main priority.
What joint mortgage options are available after a break-up?If you’ve split up with a partner, there are plenty of options to consider where your joint mortgage is concerned. Hopefully, one of these solutions will be suitable and put an end to any disagreements around your home.
Sell the property and split the proceedsThe obvious solution is to sell the property, pay off whatever’s left on the mortgage, and split the proceeds. If you find yourself in negative equity, you would have to pay off what you can and divide the outstanding debt between you.
Of course, this isn’t always a realistic arrangement, especially if children are involved. If one or both partners are unwilling to sell the property, you might want to consider another solution.
Pay off the mortgageIf your separation is amicable and you’re reaching the end of your mortgage term, the simplest way to deal with a joint mortgage is for both partners to continue making the repayments until the loan is paid off. That way, you can sell the property and split the proceeds afterwards.
Buy out your partner and stay living in the propertyIf one partner wants to continue living in the property and can afford the repayments alone, they could buy the other partner out of the mortgage. This is a common solution if one of you plans to remain in the family home with your children.
If you’re hoping to move the mortgage into just your name, you will need to contact your lender and check they are happy for you to do so. You will also have to prove that your affordability is sufficient to keep up with the repayments.
The amount one partner would buy the other out for would depend on an informal agreement between both parties, or through a solicitor. If you decide to split it 50/50, you’d calculate how much of the mortgage you’ve already repaid and divide this by two. You’d then give your partner that amount, plus their share of the deposit.
For example, if you put down £12,500 deposit each and have so far repaid £80,000 of the mortgage between you, you’d give your partner £52,500. You can pay this out of your own savings, or look into remortgaging the property to get the cash together.
Find a guarantorIf you want to take over the entire mortgage but don’t meet the lender’s affordability requirements, a guarantor mortgage could be an option if you have a family member who is willing to help you out.
As your guarantor, this person would sign a legal declaration saying that they will cover the repayments if you’re unable to do so. In order to be accepted, your guarantor would have to meet your lender’s affordability and other eligibility criteria.
Retain a stake in the propertyIf one partner is happy to move out but still wants to benefit financially from the sale of the property, there’s the option to transfer a part of its value to the other partner.
This way, one of you would still own the majority of the property, but the other would retain a stake, so when it comes to selling up both partners would receive a percentage of the profits.
Take out a Mesher or Martin OrderIf you live in England or Wales, you may be able to take out a ‘Mesher’ or ‘Martin’ Order. These are issued by the court, and can help resolve family home disputes in the event of a divorce.
Sometimes referred to as an ‘order for deferred sale’, a Mesher Order is a family court order that allows the sale of the home to be postponed for a set period of time - often because the separating couple still have children living there.
If you get a Mesher Order, one partner can remain in the property until a particular ‘trigger event’ happens; the youngest child finishes full time education; they decide to remarry or cohabit with a new partner; or by a set date, as agreed by both partners.
In this scenario, the property will remain in both names, until one of the trigger events occurs, after which time the property can be sold and the proceeds divided evenly between both parties.
A Martin Order is similar to a Mesher Order, but children aren’t usually involved. It is suitable for divorcing couples whereby one partner wishes to postpone the sale of a property so they can continue living in the marital home.
If you get a Martin Order, one partner can be granted permission to stay in the property for the rest of their life. Your home would not be sold until that person passes away, or decides to move out or remarry.
How a broker can help with joint mortgage arrangements after a separationSeparating from your partner can be an emotional and financially testing time, and you’ll want all the support you can get in preventing any unnecessary upheaval - especially if children are involved.
If you’re concerned you might struggle to make your mortgage repayments while the divorce proceedings are underway, it’s important to contact your lender ASAP and explain the situation; they may be able to help.
For assistance tackling your joint mortgage arrangements now you’ve split up from your ex, our team of advisors are here to help. They will take the time to get to know you, understand your circumstances, and help you come up with a plan of action that works for both you and your partner, as well as any dependents.
Give us a call on 02380 980304 or submit an online enquiry, and a member of the team will be in touch with a listening ear and free, no obligation advice.