How To: Mortgages When You're Divorced
It's no surprise following on from the pressures of the festive period – the money, the family arguments, the pressure for it to be "perfect" – that January is also known Divorce Month. It is estimated that there will be a 332% rise in divorce enquiries compared to the last 4 months (Co-Op Legal Services).
But what does divorce mean for married couples who own property? With 42% of all marriages now ending in divorce, how easy is it to get approval for a mortgage in the wake of a divorce? Paul Foster explains.
Mortgages For Divorcees
For many divorcees, the whole process can be stressful and upsetting at the best of times, even more so when the family home has to be sold and split up accordingly. In the wake of a divorce, both parties can find it difficult to gain a mortgage alone, when there was once two people contributing.
Traditionally, being approved for a mortgage when you are divorced has not been the easiest of tasks; stricter affordability criteria makes it difficult, as some forms of "income"
such as child support is not recognised, so a mortgage is deemed unaffordable.
The Ipswich Building Society has recently launched a scheme
to help provide support to divorced single parents who would usually struggle to gain a mortgage from other providers; allowing much easier access to a mortgage.
Mortgages are available to divorcees with 100% of the income from child maintenance taken into account when assessing affordability (provided it's supported by the Child Support Agency
or Court Order
and has at least five years to run
What's The Catch?
There really isn't a catch; all applications must be manually underwritten and will be considered on a case-by-case basis, taking note of specific circumstances.
The best part about access to this mortgage is that whereas some lenders will accept anything from 0% to 50% of child maintenance as a valid "income" – The Ipswich Building Society accepts the full amount.
Paul Foster comments:‘This new offering from The Ipswich Building Society may not be right for everyone, but it looks to be a welcome product which may increase the options available for some divorced couples, especially when resources are tight. We always consider all of the available options and give you our best advice tailored to your specific circumstances.’
Still Not Sure About Divorce?
If you have been considering a divorce but you're not sure that it's the right step for you, Simpson Millar is on hand to offer you realistic, straightforward advice.
You should speak to a specialist to discuss your options; courts are not the only option when there are family problems. You may need a mediator to help you informally work your way through family issues (financial, children, or even a separation)
without having to go through the courts.You should seek the help of a solicitor in the first instance.