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Don't forget your mortgage during marital woes

4 January 2018

As the first working Monday of January marks ‘Divorce Day’ - so-called by law firms who see a surge in separation queries after the festive period, Yorkshire Building Society is encouraging married couples heading for a split not to overlook their finances.

The number of divorces in England and Wales rose by 5.8% between 2015 and 2016 according to the Office of National Statistics.[i] Whilst splitting up from a spouse can be an emotional strain it can also have serious financial ramifications.

The Yorkshire suggests that should you find yourself on the verge of a marital split, there are steps you can take to protect yourself:

  • Make sure you know what all your monthly outgoings are, especially if your partner pays any loans on your behalf.
  • Ensure you have access to all joint accounts, including those online, so you can take stock of your finances.
  • Some married couples share login details so it is important to change passwords on any personal accounts you don’t want your partner to access.
  • Adverse credit can affect you both, so look to maintain a good credit file in the early stages of your separation. Try to stay mindful of this throughout your divorce proceedings and remain as financially amicable as possible.
  • If you have a joint credit card that has a secondary card let your spouse know you are planning to stop it. Or if you are the secondary card holder let your partner know if you still intend to use it.
  • Keep your mortgage lender and other financial providers up-to-date on your situation, for security reasons, but also so they can support you with future payments.
  • It’s important to remember if you move out but you remain named on the mortgage you are still equally liable for the monthly repayments.
  • If you stay in your marital home but your partner is the sole mortgage holder, you do not have any mortgage rights. This means if they stopped paying the mortgage you would not be individually notified, despite residing in the property.
  • Your affordability will alter if you are looking to buy a new home as a single mortgage applicant. Plan ahead to work out what you can reasonably afford.
  • Be mindful that lenders may consider child maintenance as an income, however there may be differing guidelines so it may be worthwhile speaking to a mortgage broker for advice.
  • For the person paying child maintenance, lenders will class this as an expenditure and it could reduce the amount you are able to borrow.
  • Organisations such as the Citizen’s Advice Bureau can offer advice on your rights, and charities including StepChange can help you to manage any debt you may incur as a result of a split.
Mike Sims, Senior Mortgage Manager at Yorkshire Building Society, said: “In addition to the emotional pressures a break up can cause, there will undoubtedly be financial ties you and your spouse will need to sort out – with a mortgage most likely the biggest financial commitment. “At the Yorkshire we always advise customers to contact us if their circumstances are changing, particularly those who are in or facing financial difficulties, so our specialist team of colleagues can work with them to resolve the situation positively. “We’d encourage anyone going through this difficult time to keep the lines of communication open with their mortgage lender and other financial providers to ensure they able to comfortably make any repayments.”


[i] Office of National Statistics divorces in England and Wales figures 2016 – released on 18 October 2017.

 

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