If you’re going through a divorce or separation and have shared property, this guide will help you understand what to do if you have a joint mortgage.
Sorting out a joint mortgage after a separation can be a daunting thing to do. But there are plenty of options to consider, so you find the best solution for you.
In this guide, we’ll cover the main options for what to do with your joint mortgage if you’re separating, so you can decide what’s best.
In this guide, you’ll find:
Obtaining Mesher and Martin orders
There are lots of different options. A lot of these options will need the cooperation from your ex-partner. But if you’re in a position where that’s not possible, there are also options for that situation too. Here’s the main options:
This is the simplest way to deal with a joint mortgage after or during a separation. If you can sell the home, you can pay off the outstanding mortgage and split any profits between you. This is one of the options that will need cooperation from both sides because you’ll need to divide up the money.
If your home is in negative equity, you’ll need to divide up any debts that you have. Your mortgage provider or lender should be able to help you with this.
You could consider buying out your partner’s share in the mortgage. Or, they could buy your part of the mortgage. If this is an option you’d like to consider, you’ll need legal help. That’s because rather than just transferring money, you’ll need to make sure the transfer of the mortgage is done legally.
If either of you need additional funds to be able to buy the other one out, a lender will want to know you can make the repayments on your own. Just like when you originally took out the mortgage, the lender will want to see proof you can afford the mortgage alone.
If you’re thinking of buying your ex-partner out of the mortgage, or vice versa, a lender will want to know you can afford the full repayments on your own. Even if you can afford it, lenders can be nervous about a single-person mortgage sometimes.
If you can’t afford the mortgage on your own, or the lender won’t accept you a single person, you can consider using a guarantor. A guarantor will agree to pay the mortgage if you can’t. This gives you and the lender peace of mind that the mortgage will definitely get paid. A guarantor can be anyone you trust. It could be a close friend or family member.
This option is similar to buying out a partner. Either of you could decide to reduce the share (or stake) they have in the property. This means one partner buys out a portion of the other person’s share. But not all of it. Whoever reduces their share will still need to contribute to mortgage repayments, but it means they’ll still be able to claim money from the final sale of the house. This can be a way to reduce the impact of a separation on both people, and minimises the outgoings for both.
This means you agree to completely pay off the remainder of the mortgage, so you don’t have to have a financial link to each other. This isn’t an option open to everyone, because it usually means you’ll need to be able to have a lot of money saved. If you’ve nearly paid off your mortgage you could consider paying off the remaining balance. You could do this in a chunk, if your mortgage terms allow it. Or you can pay off the remaining installments. This way, while you may both be out of pocket in the short term, you’ll be able to split and pocket the full value of the home once it’s been sold.
You might want to choose to keep your repayments going. After a separation, you’re still both legally obliged to meet these payments. Even if one of you has left the property. Before you decide on a new long-term solution, you’re both responsible for the mortgage repayment each month.
Missing a payment can lead to problems. Because it’s a joint mortgage, both your names are on the mortgage. So when it comes to payments, you’re both equally legally bound to pay the mortgage on time. And any late or missed payments will show up on both of your credit reports. You’re financially linked to your ex-partner as long as you’re both on the mortgage, even if you reduce your share or move out. It’s the same with any joint accounts you share.
If there’s any issues with paying your joint mortgage, talk to your mortgage provider as soon as you can. They should be able to help, and let you know your options.
Obtaining Mesher and Martin orders
In England and Wales, there’s another option known as a Mesher or Martin order. This is an option open to you during a separation if you need legal help to decide the terms of what happens to the home after a separation or divorce.
The main difference between a Mesher and Martin order is whether or not children are involved. If they are, usually it’s a Mesher order that's used. If children aren't involved, it’s usually a Martin order.
A Mesher order is a court order that postpones the sale of a home. It means the home can’t be sold until a date agreed on by the couple in the joint mortgage. Both names will remain on the mortgage until this date and means the house can’t be sold during this time.
A Mesher order is useful when a separation or divorce involves children because it minimises the disruption of their lives. It means they can stay in their home until they finish school or move out.
You can either set a particular date in the future, or set a ‘trigger event’ that causes the Mesher order to end. Trigger event can be things like:
The ex-partner enters a new relationship that is cohabiting
The ex-partner remarries
The youngest child turns 18 or finishes their secondary education
The youngest child finishes higher education
Because the property remains in both partners’ names and the mortgage is still joint, both partners have to contribute towards the mortgage. And both partners split the money from the sale of the property when it’s sold.
A Martin order is similar to a Mesher order. It’s a court order that postpones the sale of a home. Both people in the joint mortgage agree that they don;t want to sell until a certain time or event happens. The difference is a Martin order doesn’t usually involve children. A Martin order is a court ordered agreement that means the house can’t be sold until a certain date, or if a ‘trigger event’ happens.
Because children aren’t involved, the trigger events are different. A Martin order isn’t designed to keep the children in the same place and receive their education. In some cases, a Martin order may allow someone to live in the house for the rest of their life.
Some trigger events for a Martin order include:
The ex-partner moves out
The ex-partner remarries
The ex-partner passes away
Matrimonial rights are statutory rights designed to protect people in a marriage in the event of divorce. If you separate or divorce, matrimonial rights protect your interest in the home you shared, but didn’t own. Matrimonial rights apply to people who have a civil partnership or marriage.
In the UK, when a married couple co-habits in a home that one of them owns, that home is seen as a joint asset. This means that even if the mortgage isn’t taken out as a joint mortgage, and only one name is on the mortgage, the other person can’t be forced to leave the home during a separation.
If you’re in the situation where the mortgage is in one partner’s name, there are a number of things that can be done. If it’s in the other person’s name, and you’re concerned about your ex-partner selling the house, you can approach the land registry for a ‘Notice of Home Rights’. This will confirm, by matrimonial rights, that the property can’t be sold without your consent.
If the mortgage started after your marriage, you have a significant right to stay in the home if you want to. If the mortgage was started before your marriage, you will unfortunately have less. A claim usually expires if the divorce is finalised.
If you and your ex-partner are struggling to agree on what to do with your home, you might need to take your mortgage disputes to a divorce court. Always get legal advice if this is the case because a financial expert can talk you through your options.
Both mortgages and separations are complex. So it’s always a great idea to do your research, understand your options and speak to a professional as soon as you can so you can work out what’s best for you.
Sometimes separation or divorce is expensive. Understanding your options and costs is essential so you know where any extra costs will come from. You’ll still need to pay your mortgage until you come to a new agreement, so planning ahead is key.
Speak to your lender directly before any issues arise to discuss the situation with them. They should be able to help with giving you information and options on your mortgage. It’s always a good idea to speak to your mortgage lender before any issues arise with repayments because they’ll be more understanding than if issues have already happened.
Your mortgage lender will be able to let you know what options are open to you. There are options like mortgage payment holidays, which would be a temporary break in repaying your mortgage. In this case, you can use the equity you’ve built up, or use any money you’ve overpaid to pay the mortgage for a short period of time. Interest will still be incurred, but this is a great option if either of you can’t afford the mortgage.
Get professional legal advice if you’re worried about the implications of an upcoming separation on your mortgage or property. There are free services that can offer advice like Citizens Advice if you’re concerned about legal fees.
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