What happens if you have a joint mortgage and split up: understanding separation rights

Your rights if you separate

In the UK, your rights and options concerning a joint mortgage can vary depending on whether you are separating or getting divorced. Consulting a family law solicitor can help individuals understand their legal rights and navigate the complexities of separation and joint mortgages. Understanding the difference and how each situation impacts your mortgage responsibilities is essential.

Separation vs. Divorce

• Separation: when you and your partner decide to live apart but are not legally divorced. You may have an informal or formal separation agreement outlining your financial responsibilities, including the mortgage. Separation doesn’t change your legal obligations toward the joint mortgage; both parties remain responsible for the debt until a formal arrangement is made.

• Divorce: the legal dissolution of a marriage. It typically involves a formal court process that includes a financial settlement, which addresses how the joint mortgage and other assets are divided. The court can make binding decisions on how the mortgage should be handled, which could involve selling the home, one partner buying out the other, or continuing joint ownership under specified conditions.

Key steps to consider

1. Understand the Divorce Settlement: If you are getting divorced, the court’s financial settlement will dictate how your assets, including the joint mortgage, are divided. This settlement can significantly impact your mortgage responsibilities.

2. Separation Agreements: If you are separating but not divorcing, it is advisable to create a separation agreement that outlines how you will handle the joint mortgage. This agreement can help prevent misunderstandings and disputes.

3. Take Action on Your Mortgage: Whether you are separating or divorcing, your joint mortgage remains unchanged until you or your partner take steps such as selling the home, buying out your partner, or paying off the mortgage. It is important to discuss joint mortgage arrangements with your partner and seek professional advice to devise a plan that works for both parties.

4. Sell the Home: If you choose to sell, both partners must give written approval before listing the property.

Paying the mortgage after separation

Until a formal agreement is established, both partners are equally responsible for making mortgage payments. Missing payments can seriously affect both partners' credit scores and future lending decisions.

What to do

• Communicate with Your Ex-Partner: Agree on mortgage payments and responsibilities.

• Notify Your Lender: Inform your mortgage lender and discuss potential support options. Speaking to your mortgage lender or adviser can help you understand your rights and liabilities, and they may offer solutions tailored to your circumstances.

• Consider Legal Advice: This can help you navigate the complexities of mortgage payments during separation.

Your mortgage options if you separate from your partner

When you and your partner separate, several options are available to manage your joint mortgage:

1. Buy out your ex-partner:

   • You can buy out your partner's share if you plan to stay in the property.

   • This involves removing your partner’s name from the mortgage and transferring it to your name.

   • Consulting a mortgage adviser can help you understand this process.

2. Sell the home and split the money:

   • Selling the property can be a straightforward way to divide assets.

   • You can pay off the remaining mortgage or split the proceeds after the sale.

   • It’s important to check the title deeds for details on legal ownership.

3. Keep a share in the property:

   • One partner keeps the home, while the other retains a percentage of its value.

   • This means the partner who moves out will get a share of the property’s value if sold later.

4. Pay off the mortgage together:

   • If the mortgage is nearly paid off, you and your partner might choose to continue payments until it’s fully paid.

   • Both partners remain responsible for the mortgage repayments until the mortgage is fully paid off or another arrangement is made.

   • Afterwards, you can sell the home and split the proceeds.

If you do not own the property

You still have rights if you do not own the home but live in a property with a joint mortgage. The rights and obligations for cohabitees are essentially the same as if you were living in a jointly owned property with a family member. Legal advice can help you understand your position and best action.