How Do I Get a Mortgage After a Divorce?

If you have just gone through a divorce or are currently in the process of divorcing your ex-partner, you may be wondering how it will impact your ability to get a mortgage. Obtaining a mortgage after getting a divorce is relatively straightforward. However, if you need to find somewhere to live during divorce proceedings it can be complex.

The good news is you can get a mortgage both during and after a divorce. There are some important factors you will need to be aware of and providing you approach your mortgage correctly it should be stress free.

Let’s explore how to get a mortgage after a divorce in more detail.

Can I Buy a House Before the Divorce is Finalised?

Yes, you can buy a house before a divorce is finalised. However, you need to make sure you are aware of any repercussions of doing so.

When you get a divorce, your marital assets will be distributed according to the court ruling. Buying a property before the divorce agreement is finalised can mean the property is counted toward your overall marital assets.

In this respect you should undertake the following when buying a property before the divorce is finalised:

• Seek legal advice
• Understand whether a judge is going to class your new property as a marital asset
• Obtain a mortgage capacity report if requested to outline your complete financial situation

Obtaining Legal Advice

Divorce proceedings are both stressful and costly in most cases. It can also be extremely confusing as the law around divorce can be complicated – especially around who gets what when the divorce is finalised.

You can seek legal advice relating to your divorce in a few ways. Most popular (and most expensive) is to consult a solicitor specialising in divorce and family matters. A solicitor will aim to get you the best outcome possible, but the ongoing costs can escalate making any monetary benefit of using one negligible.

Alternatively, you can approach a McKenzie Friend and represent yourself during court proceedings. McKenzie Friends will be able to guide you through the legal aspects of your divorce at a fraction of the cost of a solicitor. The downside is they will not be able to speak on your behalf in court although they will be able to accompany you to hearings.

Both a solicitor and McKenzie Friend will be able to signpost the way a court is likely to view your new mortgage.

Marital Assets and Non-Marital Assets

Not all assets will be considered marital assets, and a judge will determine how much of your assets will be considered in the final agreement.

Ordinarily a new property purchase after divorce proceedings have commenced will not be considered a marital asset. You should be aware though, your deposit or any money you put down on the new property may be classed as an existing marital asset and therefore your ex-partner may be deemed to have a financial interest in your new property.

How a Mortgage Capacity Report Can Help

Normally prudent judges request mortgage capacity reports from both parties. This is to get an overall financial picture and to ascertain how different outcomes will impact either party after the divorce.

A mortgage capacity report must be compiled by a financial adviser or mortgage broker that is authorised and regulated by the Financial Conduct Authority (FCA). Boon Brokers has created a streamlined Mortgage Capacity Report service for clients requiring a report for divorce court hearings.

The report will show the judge what mortgage products are available to you and help them reach a fair divorce agreement.

Will A Divorce Affect My Credit Score?

No, the divorce itself will not affect your credit score as there is no need for a judge to access or amend your credit file.

That does not mean your credit score will remain unaffected by the divorce though as you may need to secure credit to buy out a jointly owned property or meet financial obligations related to your finalised divorce.

In this respect, you should monitor your credit score and understand how different types of finance impact your score.

Tips to Increase Your Chances of Mortgage Approval

To avoid confusion, it is almost always best to wait until your divorce has been finalised before buying a new property. This is because once the divorce is finalised you will know how much money you are left with to use as a deposit and can approach the mortgage without concern.

Before applying for a mortgage, you should discuss your situation with a qualified mortgage broker. They will be able to compare the mortgage market for you and provide an Agreement in Principle.

An Agreement in Principle is particularly useful after a divorce as the lender will conduct a soft credit check and ensure your credit score is suitable. It will also encompass your deposit amount and basic affordability to ensure you can obtain the amount of money you need.

Mortgage Capacity Reports and Your Broker

If you have already received a mortgage capacity report, you will be able to use the information and the mortgage broker you have established a relationship with to secure your mortgage.

Because divorce proceedings can be lengthy, you may find the information on the mortgage capacity report is outdated by the time you reach an agreement with your ex-partner. Using the same broker in this situation is excellent as they will already be aware of your basic financial situation and can amend details to reflect your current circumstances.

Speak to a Mortgage Expert

Irrespective of your financial situation it is best to speak to a Whole of Market mortgage broker before looking for a new property. This will enable you to make an informed decision about your affordability and how buying a property will impact your divorce proceedings.

Boon Brokers is a Whole of Market Mortgage, Insurance and Equity Release Broker.

Boon Brokers provides mortgage capacity reports for a fixed fee and all other mortgage advice is fee free.

Contact Boon Brokers to discuss your divorce and mortgage options today.