If you’re going through a divorce, it’s understandable you might be concerned about your home – especially if both you and your ex-partner have a joint mortgage.
The good news is there are a number of choices available to you when dealing with a joint mortgage after separating, and at least one of these should help you to come to an agreement as amicably as possible.
What are the options for a joint mortgage during a separation?
If divorce is likely, you have a few options to choose from when considering your joint mortgage:
- Sell the home: one of the simplest options is to sell the home, pay off whatever remains of the mortgage and split the rest of the money. If you’re in negative equity (where your outstanding mortgage is higher than the value of your home), you may have to divide any outstanding debt between you - though you should talk to your lender to find out what your options are
- Buy out your ex-partner: one of you could choose to buy the other out of the mortgage, but if you need to borrow money to do this, you will have to prove to your lender that you can afford the mortgage repayments on your own
- Retain a stake in the property: another option is to transfer a part of the home’s value, so one of you would own most of the property, but the other would retain a stake in the home. This means they’ll be entitled to a percentage of the value if the home is sold
- Pay off the mortgage: if you’ve nearly paid off your mortgage, and if the divorce is amicable, it could make sense to both continue paying the mortgage until it’s completely paid off. This way you’ll be able to sell the home and split the entire proceeds afterwards
- Find a guarantor: if one person wants to take over the whole mortgage but can’t afford the payments on their own, they can apply for a guarantor mortgage. This is where someone like a family member agrees to cover the repayment costs if you’re unable to
Mesher and Martin orders
You may also have the choice of taking out a Mesher or Martin order if you live in England or Wales:
A Mesher order is a family court order that prevents the home being sold for a set time, usually because the couple separating still have children living in the home.
If you take out a Mesher order, one of you can stay in the property with the children until a certain point - normally when the youngest child turns 18 or finishes secondary education, though sometimes it could even be higher education.
The property stays in both owners’ names for this time, even if only one person is currently living in the property.
A Martin order is similar to a Mesher order, but children aren’t usually involved.
In this case, one of you could stay in the property for the rest of your life – and the home would not be sold until that person moves out, remarries or passes away. This is so long as the other partner does not immediately need the money for their own needs.
Paying the mortgage after separation
After you’ve separated, it’s important to still keep repaying the mortgage on time, even if you’re still deciding what to do. A joint mortgage means you’re both liable for the mortgage until it has been completely paid off - regardless of whether you still live in the property.
If you miss a payment or fall behind on payments, it will negatively affect both yours and your ex-partner’s credit report. As long as both of your names are still on the mortgage, you will still be financially linked.
If you are concerned you might miss mortgage payments, it’s best to speak to your lender as soon as possible to explain the situation.
In the UK, living together when you’re married means the home is legally considered a joint asset, even if only one person’s name is on the deed – this means no one can be forced to leave the home.
If the mortgage or property is only in one person’s name, the other can go through the land registry for a Notice of Home Rights to confirm their matrimonial rights and prevent the property being sold without their say – though this is normally only until a divorce settlement has been agreed.
If the property was owned by one of you before the marriage, the other’s claim is likely to be much weaker – unless you had a pre-nuptial agreement in place that already decided how you’d divide your assets if you separated. In either case, it might be worth seeking legal advice to get a better idea of where both of you stand.
Divorces don’t always go smoothly, and you might find that you have to go to court to settle a dispute about your mortgage and property. If your divorce looks to be going this way, it can be a best to seek out legal advice – although this can be costly and time-consuming.
The court will take a number of factors into account before making a decision about your home, but if children are involved, they will usually become the main concern.
Speak to your lender
Going through a divorce can have a big impact on your finances, so if you think you might struggle to make your mortgage repayments, it’s important to contact your mortgage lender straight away.
Your lender could agree to give you a payment holiday – a temporary break from having to make mortgage repayments – depending on the terms and conditions of your agreement.
However, be aware you will still be charged interest during this time and you’ll need to make up these payments before the end of your mortgage term. Also keep in mind that most lenders will require you to have previously overpaid on your mortgage before agreeing to a payment holiday.
Mortgages can become complicated during a divorce, so if you’re worried, it could be a good idea to seek help and advice to make the process go as smoothly as possible.
You may want to talk to a financial or legal adviser so you know exactly where you stand and what your rights are, but keep in mind you will need to pay for these services and they can be pricey.
Alternatively, charities such as Citizens Advice, StepChange and National Debtline can offer free advice on any money worries you may have.