One of the first questions that you will ask is “can I keep the house?”. I would love to be able to say yes of course. It sounds like a very straightforward question but, believe me, it can be anything but.
The decision, in part, will be down to the financial agreement that you work out with your ex. The other part is whether you can afford to keep the house and can you secure the mortgage borrowing to do so.
Where to start?
You need to begin by doing some research. This should start with getting the house valued. Which you will also need to agree the division of assets. It is a good idea to get valuations by at least two local estate agents. A written “market appraisal” is generally provided. This will give you an idea of the price they think you should market the house at. Often also providing an achievable estimated sale price.
How much can you borrow?
The next step is to find out how much you may be able to borrow and how much that will cost you monthly. This is to evaluate if a mortgage is affordable. There are a number of ways of researching the mortgage market. You can do it yourself, online or in person, going from lender to lender or using a search company. There is no cost to doing it yourself. However, you may find that you don’t achieve the best mortgage for you, whether that is not being able to borrow what you need or paying a higher interest rate than you needed to. Therefore, I would suggest that using a recommended mortgage adviser is worth the small cost of their fee. They have experience in the field and know where to look for the best deals.
I can’t borrow enough to keep the house. What now?
As upsetting as this fact may be to you, sometimes a change of house can be better for your mental space. Your old house may be full of memories of your ex and, good or bad, distancing yourself from these is always best.
How much you can buy a new house for is based on the amount you can borrow and the amount of equity you receive from the sale of your old house. The amount of equity you receive, will form part of your wider financial settlement. It isn’t always as easy as 50/50.
As I said at the beginning, it is complicated. Not securing enough mortgage borrowing doesn’t always mean that you have to give up your home, your solicitor may still be able to help you to find a way. The other thing to remember is that a new home may be the new start that you need, even if it doesn’t feel like that now.
If you need any mortgage adviser recommendations or would like to chat about anything divorce related please feel free to get in contact!
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Tamsin Caine is a Chartered Financial Planner at Smart Divorce. She specialises in working with separating or divorcing clients to help them to understand dividing their finances to move forward with their lives. If you would like to speak to Tamsin or find out more about how she can help, email her at Tamsin@smartdivorce.co.uk or call her on 07975 922766.