According to an article published in the Daily Mail, banks are looking into creating a ‘divorce mortgage’ specifically to help divorcing couples find a way to keep the property in the name of a single spouse.
The new offer would mean that an individual could borrow enough to buy their spouse out, which would mean they could remain in the family home.
If this is the case, then it would certainly help ease the trauma that we often see when clients come to us trying to resolve their mortgage issues when separating.
Inevitably, once divorced, one or more partner will be looking to buy another property – and sometimes the finances and property equity in the marital home just doesn’t stack up.
Homeline Mortgages are the mortgage brokers who like to say ‘yes’ – but of course this only means responsible borrowing/lending arrangements where the mortgagor is financially able to meet their commitments.
In many situations the initial mortgage will have been issued taking into consideration two incomes. Upon divorce, one partner (often the woman) may find themselves reliant on maintenance payments from their ex-spouse, and unless specific financial arrangements are in place, this may be insufficient to cover mortgage and living costs.
The article states that this new ‘divorce mortgage’ will be for couples of all ages, in the hope that fewer divorcees will be forced to sell their property, but it also takes into account the rise in the number of over 50’s who are reportedly splitting.
Government statistics show that the over 50’s now account for the largest increase in the divorce rate, and this can add to the financial pressures faced, as their borrowing period is reduced and they may be retirement planning too.
In the article, The Daily Mail reports that almost three in ten divorced couples end up selling their family home (according to figures from Nationwide) – usually because one half of the divorcing couple cannot afford it on their own.
Certainly much stricter affordability checks introduced by banks two years ago have made hanging on to the family home even more difficult after a break-up – so any assistance that banks are planning is sure to be beneficial to those facing divorce and the possibility of losing their marital home.
Because we approach our client relationships by being friendly and supportive, we fully appreciate that getting divorced and sorting out financial arrangements can be a very stressful and tricky business. But, we do want to say that if we can help you – then we will.
At Homeline Mortgages we’re going to keep an active watch on any developments on the ‘divorce mortgage’ – but in the interim, please get in touch to discuss any mortgage requirements with us. If you are getting divorced and having to sell your property, speak to our mortgage specialists about how much you are eligible to borrow to invest in setting up a new home, and starting the next phase of your life!
If you would like to discuss this, or any anything else, contact our advisers today on 01202 937444 or visit our other offices to speak to a mortgage broker in Reading or a mortgage broker in Bournemouth