What Are The Options For Dealing With A Joint Mortgage On Divorce?

If you and your ex-spouse have a joint mortgage together, you can either sell the property or transfer the mortgage into one person’s sole name.

Make an agreement as soon as possible

Following a separation or divorce, there is often confusion as to what should happen to a joint mortgage. Common questions include: who is responsible for paying the mortgage? Can I get myself off the mortgage? And what happens if a mortgage payment is missed?

The first thing to know is that if a property is jointly owned, you both continue to be responsible for discharging the mortgage payments. This is the case, even if one person no longer lives in the property. This comes as a shock to some, who wrongly assume that they don’t have to contribute towards the mortgage if they’ve moved out. Because you both remain liable for the debt, you will both be penalised if the mortgage isn’t paid. This means that if your ex-spouse says they will pay the mortgage and they don't, then your credit rating will be impacted as a result.

For these reasons, it is vital that you address your joint mortgage – and put an agreement in place – as soon as possible.

What are the options?

If you have a joint mortgage and your relationship breaks down, the two main options are to:

1. Sell the property
2. Transfer the property

These options are discussed in greater detail below.

The best approach will depend on your personal preferences and your circumstances. If you have children, it may be that you want to keep the family home to minimise any disruption. However, whether or not this is feasible depends on each person’s financial position.

If you and your ex-partner cannot agree what to do with the family home following separation, then we recommend that you seek legal advice. A family law solicitor can explain the options and determine how to protect your best interests.

Sale of the Property

If both you and your ex-partner are agreeable to selling the family home, the process can be quite straightforward. After completion, the net proceeds can be divided between you, as per any financial agreement you have reached. If you cannot agree, you need to enter into negotiations with the help of a solicitor, or attend mediation in an to attempt to resolve the dispute.

If an agreement cannot be reached, the Court will have to make a decision on your behalf. This may be the only option to enable funds to be released.

Transfer of the Property 

Following separation, some couples decide that the best option is for one party (usually the main carer) to remain in the family home with the children to limit any further upset for them. If so, you may agree that the mortgage will be transferred into one person’s sole name, freeing the other person from the liability.

If you want to take the mortgage on, you will need to speak to your mortgage advisor to establish if you are able to transfer the mortgage into your sole name. If your mortgage provider gives you the go-ahead, you will then need to reach an agreement with your ex-spouse as to how you will buy their share of the property. If you intend on paying a lump sum, this figure will depend on how much equity is in the property. A valuation may be required if this cannot be agreed between you both. Agreeing a realistic valuation is vital as it will impact how much you will have to raise to pay to your ex-spouse. This could be the difference between staying in the property and selling.

Speak to our divorce solicitors

There are many difficult decisions to make following a divorce or separation, including what to do with the family home. Contact one of our approachable and friendly family law specialists for a free no-obligation initial appointment to discuss your circumstances.