Do you have a joint mortgage but are unmarried and separated from your partner? Dealing with a relationship breakdown can be tough, and so can not knowing what happens to your joint mortgage.
Managing separation and home ownership is no doubt stressful, but we’re here to guide you. Read on for a better understanding of the legal process behind having a joint mortgage and separating.
What is a Joint Mortgage?
A joint mortgage in the UK is a loan taken out by two or more people to buy a property. All individuals sharing the joint mortgage are 100% responsible for paying repayments on time to ensure a legal claim to the property. Typically, a joint mortgage is shared between two people (usually a couple), but some lenders allow more individuals to purchase a property together.
Can You Get a Joint Mortgage if You Aren't Married?
Yes, you can get a joint mortgage if you aren’t married. As mentioned above, a joint mortgage can be shared between more than two people, and you don’t always have to be in a relationship, let alone married.
Who is Responsible for a Joint Mortgage After Separation?
With it being a joint mortgage with both of your names signed on the mortgage, it is both of your responsibilities, as you’re financially tied to one another. Regardless of living arrangements or your current relationship status, you’re both legally responsible for the mortgage repayments.
Thus, if you miss a mortgage payment, you will both feel the impact of this. It will damage your credit score and credit history, making it more expensive and harder to get future mortgages.
The same goes for any other joint financial product you have such as:
- Joint bank accounts
- Joint loans
- Joint utility bills, etc
What Happens if My Partner Stops Contributing to the Joint Mortgage?
If your partner stops paying towards the joint mortgage completely and doesn’t seem open to paying it at all, what you should do is immediately get in contact with the lender and explain the situation. Ask if there’s any temporary support they can provide (even if they can’t provide any, it’s still better to let them know than not at all).
If you can’t manage to sort out the situation between you both, seeking legal and financial advice to look at what options you can take is absolutely what you should do.
Can You Keep a Joint Mortgage After Divorce?
In short, yes, you can keep the mortgage after divorce. As long as both of your names are on the mortgage, from the lender’s perspective, it doesn’t matter what your relationship status is. Unless one of you has your name removed from the mortgage, it is both of your responsibilities.
And although it may be a really tough place to be in, if both of you are missing mortgage payments, it will make you seem unreliable to lenders, thus negatively affecting your credit score for the future.
How to Manage a Joint Mortgage After Separating Unmarried
If you're unmarried and separated, you and your now ex-partner have zero financial obligation towards one another. This can be complex when there's a joint mortgage involved, but rest assured, we're here to advise you on what to do.
Despite separating, unmarried couples with joint mortgages are entitled to live in the shared mortgaged property. While this might not seem something you want to do, it's important to know that neither of you can force the other out.
Let’s take a look at some options to consider if you have a joint mortgage, but are unmarried and separated.
Option 1 - Sell
A popular option for couples who separate is to sell their mortgaged property and split the proceeds. While it's sad to say goodbye to your once-shared home, selling is a sensible and convenient option rather than worrying about further repayment obligations.
Note: By selling your home, you and your ex-partner can pay off the remaining mortgage balance, share the amount left over, and be free from being financially tied together.
Option 2 - Take Over
If either you or your ex-partner is happy to move out of the property and allow the other to remain, you can do so. Mortgage lenders care most about repayments being made on time, although you’re now separated.
However, allowing one person to take over must be considered carefully - after all, this decision will result in your moving out of the home and allowing the other to stay.
Note: Although you can move out of the property and let your ex-partner (or vice versa) take control of the mortgage repayments, you are still liable for repayments if the home stays in your name.
Option 3 - Buy Out
To completely start fresh and handle your mortgage independently, you could consider buying out your ex-partner. While this sounds simple, it can be complex.
You must have the funds available to buy out your ex-partner, or else you may need to consider remortgaging. To buy out your ex-partner, you must ensure you can pass all affordability and eligibility checks completed by the lender.
Note: Opting to buy out the mortgage means that you’ll be taking over the repayments, allowing the other to move out, with no obligation to make any further mortgage payments.
Option 4 - Defer the Sale (Mesher Order)
Another option you have is deferring the sale until a later date if you’re either undecided or you have children, in which case you don’t want them to feel any disruption in their own lives.
If you both agree on this, you can work with a solicitor to arrange a ‘Mesher Order’. This essentially means deferring the sale until a later date when you choose, or a ‘trigger event’ occurs.
A trigger event could be for example:
- Your child leaves for university
- Your youngest child turns 18, and you feel comfortable with this process
- The resident parent moves out permanently
- One of you starts living with another partner
Top Tips for Managing a Joint Mortgage After Separation
- Review Documents: Reviewing key documents is essential, such as ownership documents and important agreements made upon securing your joint mortgage.
- Seek Professional Assistance: Speaking with trusted professionals, such as mortgage advisors, can help you understand the options available and the potential financial implications of each.
- Reach Out to Your Mortgage Lender: Similar to speaking with a professional for advice, your mortgage lender can guide you in the right direction and tell you what steps to take to ensure the mortgage can still be paid despite going through a separation.
Expert Advice When You Need it Most
If you require expert advice on what to do regarding your shared mortgage after separation, Bell Financial Solutions can help. Our team are highly experienced, offering a hassle-free approach during this stressful period.
We understand that it can be tough not knowing what to do with your joint mortgage after separation, but with our guidance and support, you can carefully plan your next steps.
Contact us today to discuss your circumstances with our friendly and helpful team.
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