How Is A House Divided In A Divorce?

If you are married or in a civil partnership and have arrived at the unfortunate stage where the relationship has irrevocably broken down there are many matters that need to be worked through and resolved to the mutual agreement of both parties. The division of the family home mortgage, assets and / or the transfer of equity within it will often be key to getting a resolution. In any area the advice and / or guidance of a matrimonial specialist family solicitor is essential and should be used to, at the very least, give an independent view on any key matters such as financial matters and of course arrangements for the children.

Transfer Of Equity Options

A big area of the whole is what happens to the matrimonial home and how are both parties going to keep a roof over their heads.- First Choice is a mortgage advice provider with over 25 years experience, we do not provide legal or matrimonial advice but we can help you when it comes to carrying out any changes agreed that affect the mortgage on the matrimonial home, alongside helping a party leaving the property to purchase a home.

In our experience the following are the likely ways in which the home queries issue can be resolved (please note arrangements for the children would sit as a separate area to these points);-

• Agree for one party to buy the other out via a transfer of equity mortgage.
  
  In this scenario one partner stays in the house but increases their mortgage balance to pay an amount to the departing party as a settlement for the shared home. In many cases this money would be used as a deposit by that party to get an alternative home. This would normally involve a remortgage and the removal of the leaver from the property title.
• Carry out a transfer of the equity in the home to the remaining party.
  
  Here the leaving party may agree to give their share or part of their share of equity in the property to the remaining party in full or part settlement of any financials between the couple. Thereby reducing / negating any spousal maintenance and enabling the leaver to afford their accommodation alongside any child maintenance. The transfer could be 100% of your share or a part percentage. If a part percentage is being kept by the leaver a charge could be arranged over the property in favour of the leaver to ensure that if the property is sold or the equity utilised (e.g. via a remortgage) the leave gets their share.
• The house is sold and the proceeds divided.
  
  The split may be even amount or you may agree it stepped to one party or another based on their respective incomes and who is going to have the children to house for the majority of the time. It is an unfortunate but sad possibility that divorce will often result in downsizing of property by both parties and could even result in one having to rent, at least for while. Hopefully if there is enough equity to be split and enough income individually then both can be housed properly.
• Leave the home ownership joint and one party remain there.
  
  The situation here could arise if the children need the space and the leaver can afford to wait for a future time before getting a share of equity from the property. This could be agreed to be when the children pass 18 or can be set in England and Wales via a `mesher court order` which stipulates when (as in which circumstances trigger the process) the house is to be sold. Contributing to mortgage payments by both could be part of this scenario too.

Other useful factors to bear in mind:

The value of property can go up or down so make sure you are both happy with the valuation the figures of any settlement are being based upon.

If the party wants to remain but the income is tight all round then a family member may be able to help by becoming a guarantor for the mortgage to help the remaining party get approved for a mortgage without the spouse being on it.

Any removal of a person from a mortgage increases the risk to a lender therefore they will need to approve any change in title holding. Good factor here is the one coming of is more likely to be able to get another one, as any existing mortgage will be taken into account by mortgage lenders.

Court orders (consent orders) can be used to nail down what is occurring regarding the assets and any spousal maintenance so all parties know where they stand.



If you would like to know the figures for your scenarios that can be brought about by a transfer of equity mortgage or other mortgage / remortgage based solution please contact our UK based mortgage team on 0800 298 3000 (free phone) or mobile friendly 0333 003 1505 alternatively fill send over our shorton line enquiry form

Mortgages & Remortgages 8.4% APRC. Representative Example: Borrow £120,000 over 25 years at 5.99%, £778.86 pcm fixed for 3 years at 60% LTV. Then at 8.75%, £974.86 pcm, variable for 22 years. Total payable £286,416. Total cost of credit £166,416 (including: £985 broker fee, £999 lender fee & £164,432 interest)

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