How is a house divided in a divorce?
Deciding what to do with your home when a relationship ends can be hugely complicated, and if you're struggling to reach agreement you will need to seek professional advice.
However, whichever option you take, your property will need to be valued for the settlement. If you're unable to agree on a settlement figure, the court will order a joint report from a local estate agent and surveyor.
These are some of the most common options for dividing or transferring ownership of your property:
Both selling and moving out
It can be a huge wrench but sometimes this is the only financially viable option.
- Find out more: how to sell a house
Selling at a later date
Some couples choose to wait until a certain event occurs before selling their home, for example, when their youngest child turns 18.
Until that event occurs, one person might move out but still retain their stake in the property.
Buying your partner out
If finances will allow, one of you might choose to buy the other person's share in the property so that ownership transfers into just one of your names.
What does divorce mean for your joint mortgage?
Even after you've divorced, you and your former partner will still be financially tied if you have any joint financial products, including a mortgage.
This means that any failure to make mortgage repayments - whether you're still living in the property or not - could damage both your and your partner's credit scores. This could in turn seriously hamper your chances of getting a new mortgage in the future.
Worse still, if one party refuses to pay the mortgage, for whatever reason, it could result in the property being repossessed.
For these reasons, it's important that you notify your mortgage lender about the situation straight away.
Which? Mortgage Advisers can help you work through your mortgage options and recommend the best course of action for you.
Taking on the full mortgage on your former matrimonial home
Couples often tend to transfer their joint mortgage into one person's name after a divorce.
This means that only the person named on the mortgage will be liable for the mortgage repayments. This has several benefits, including:
- Breaking financial ties that will impact both of your credit scores
- Stopping the risk of mortgage repayments being compromised by one person
- Allowing the person who has been taken off the mortgage to borrow again for a new property.
If you decide to stay in the former matrimonial home and take on the mortgage on your own, your lender will recalculate whether or not you'll still be able to afford the repayments.
If they don't think you'll be able to but you're confident that you will, one option might be to apply for a guarantor mortgage.
With a guarantor mortgage, a parent or close family member agrees to guarantee your mortgage debt.
This means that if you miss a repayment, your guarantor will be liable to cover it.
- Find out more: guarantor mortgages
Buying a house and getting a mortgage after divorce
If you want to move to a new home and take out a mortgage, your ability to do so will depend on your financial situation coming out of your divorce.
Mortgage lenders take a variety of factors into account including how much deposit you have, your income, creditworthiness, debts you owe, average spending and general personal circumstances.
Some lenders, such as The Loughborough Building Society, will consider granting 100% mortgages to people who have suffered a relationship breakdown. An independent mortgage broker can advise you on how much you could be eligible to borrow.
But before deciding on a budget for your new home, remember that the costs of buying a house go far beyond what you'll pay for your mortgage.
- Find out more: how to buy a house
Get personal, impartial mortgage advice
Navigating your way through the complicated world of mortgages is confusing at the best of times, but when you're also going through a divorce it can feel overwhelming.