Separations, where jointly owned properties are involved, can often be complex and difficult. In theory, unless an agreement has been reached to remove their name from the mortgage, your ex will still be liable to pay their share.
There are a number of options available to those separated, who still own a property in joint names.
Many of the options will depend upon the amicable status of the separation and the financial standing of each party.
What if My Ex Refuses to Pay Their Share of the Mortgage?
Legally one of the parties involved in a joint mortgage can only be removed with the joint agreement of both. You would obviously need to give significant consideration to this move as you would be liable for all the mortgage payments going forward.
However, in the event that one of the parties on the mortgage failed to pay their payments, the lender would pursue both parties.
They would treat it as a default by both parties irrelevant of who made part payments.
How Would Non-Payment Impact My Credit Rating?
Unfortunately, even if you were able to pay your share of the mortgage, but your ex-partner refused to do so, this would go down as a missed payment for both of you.
As a consequence, you could see your credit rating severely impacted through no fault of your own.
It is, therefore, very important to discuss the numerous options regarding jointly owned properties.
Can I Remain in the Property With the Children?
As if the situation was not complicated enough, the consideration of children adds a further degree of complexity. If the parties are unable to come to an amicable agreement regarding the future of the property, then a family court may issue a Mesher order.
This is in legal order which allows one of the joint owners to live in the property with the children.
The property will stay in the name of the joint holders and at a predetermined point, sometimes when the youngest child reaches 18 or concludes secondary education, the property would be sold and proceeds shared.
What Is a Martin Order?
A Martin order is similar to a Mesher order except there are no children involved. Where, for example, one of the joint owners has a limited income, they may be allowed to reside in the property for the rest of their life.
There may also be conditions where the property would be sold if that person was to move out, pass away or remarry.
This kind of arrangement is more popular where the party moving out has significant income and no immediate requirement for the funds.
My Name Is Not on the Deeds; Do I Own Part of the Property?
There is a common misconception that cohabitation creates rights over a family home, similar to couples who were married. This is not the case.
However, if your name is not on the deeds, you may still be able to apply to the land registration to protect your place of accommodation and block a sale without your approval.
Unfortunately, many people automatically assume that they will be with their partner forever and will often fail to address issues such as ownership deeds.
Thankfully, there are a variety of legal protections afforded to all parties.
Who Will Help With the Mortgage if My Ex Is Made Bankrupt?
Unfortunately, in the event of bankruptcy, it is likely that your ex’s share of your home will be identified as an asset and potentially sold to repay creditors. You may be able to delay or block the sale of your home, but at some point, mortgage repayments will have to recommence.
If your previous partner is not in a position to cover their share, then you will be expected to cover all payments.
If you foresee any problems with regards to mortgage payments, it is sensible to approach your lender and try to find an amicable solution.
What Are the Options Available With Joint Properties After Separation?
There are some relatively simple options available but whether each party would be amenable is a whole different matter.
These options include:-
Sale of Your Home
It may be possible to sell the joint property, pay off the mortgage and split the surplus capital between both parties.
While it would obviously depend upon the size of mortgage remaining and the value of the property, it may be possible to downsize and acquire another property.
Where there is negative equity, both parties would be expected to contribute to the outstanding debt over and above the value of the property.
Buyout Your Ex-Partner
Whether as a means of trading off additional assets held in joint names, acquired during the marriage, or arranging an alternative mortgage, there may be the option to buy out your ex-partner from the property.
This tends to be a relatively popular option because it allows a clean break with regards to joint property ownership.
Retain a Stake in the Home
Where there is equity in a property, and one of the parties would like to take on the mortgage, it is possible that the other party would retain a stake in the property going forward.
They would receive their share of proceeds when the property was eventually sold.
Payoff the Remaining Mortgage
While the scenario surrounding joint property ownership will vary in each case, there may be the option to pay off a relatively small remaining mortgage.
This would convert the property to a paid-up basis and allow a straight sale with proceeds split between both parties.
Should I Take Financial and Legal Advice?
While there is more than enough research on the Internet, it is very important to take both financial and legal advice in the event of a separation.
Even though clean breaks are relatively uncommon, there is no reason why an amicable arrangement could not be agreed to allow both parties to move on.
There are numerous issues to take into consideration regarding jointly held properties after separation.
Failure to do so could lead to deterioration in the credit ratings of both parties where one of the joint owners is unable to cover their mortgage payments.
This perfectly illustrates why some form of agreement needs to be reached sooner rather than later.
How Can The Mortgage Bank Help?
Here at The Mortgage Bank, we have partnered with some of the UK’s leading mortgage brokers.
They have already helped thousands of people get the best mortgage deal even people that have been refused before, and they can do the same for you.
Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.