Separating from your partner or spouse is already a challenging period in your life. When you share a joint mortgage, the challenges associated with splitting up from either a long term or short-term relationship can feel an extra load. But despite the concerns you have about your home and financial future, there are options. In this article, we look at the various options.
Your options if you have a joint mortgage
Pay the balance on your mortgage
If you are separating and have only a nominal amount left on your mortgage, it may be a good option to pay it off. This can be a straightforward approach to the overall aim of selling the property and splitting any equity in it between you and your partner. It is often a preferred option for those who have parted ways amicably and are able to jointly make payments even after they have separated.
Sell the property
Sometimes, a simple sale of the property is the best course of action. This way, the house can be sold, any outstanding mortgage balance can be paid off and if there is any equity left in the property, this can be divided between the two parties. If your mortgage is in negative equity, both former partners can agree to divide the debt and pay this off. This option allows couples to sever ties more wholly and have a fresh start.
Property buy-out
In other instances, for example, if there are children living in the family home, one partner may opt to buy the other out and remain living in the house with the children. The person buying the other out will be responsible for making the monthly payments on their own and will need to approach their lender and ensure they pass an affordability assessment. An agreement on the amount they need to pay to the other partner would need to be reached too.
Defer the sale of the home
If you were married to the person who you have the joint mortgage with, then the sale of a home can be deferred, in some cases. A Mesher Order can be used by the courts to postpone the sale of the home if one of the spouses wishes to remain there until a particular point or for a set period of time. The event prompting the eventual sale could be a child reaching the age of 18 or when they have completed full time education. It could also relate to one of the spouses remarrying or living with them in the property.
A final point
It’s important to remember that any changes to your mortgage will not take effect unless some form of action is taken, for instance, when one person buys the other out or the mortgage is paid off. Until any action is taken, you will have a joint responsibility with your partner to ensure the agreed monthly payments are made. If these payments are not met, then your individual credit report could be negatively impacted as a result.
In conclusion
If you and your partner have made the decision to separate, try to work together to reach an agreement on what will happen with the mortgage. The more cordial the split is, the easier negotiations are likely to be. Knowing the choices you have available when it comes to your joint mortgage is key to making good decisions, and securing your future, so it’s important to gather as much information as possible from the beginning.
